EXHIBIT 10.01
SEVERANCE AGREEMENT
This SEVERANCE AGREEMENT (the "Agreement") is dated as of May 6, 2002,
between Wabash National Corporation (the "Company") and Xxxxxxx X. Xxxxxxxx (the
"Employee").
WHEREAS, the Employee serves as Senior Vice President, and in that role has
been and is expected to continue to be important in developing and expanding the
business and operations of the Company and possesses valuable knowledge and
skills with respect to such business; and
WHEREAS, the Board of Directors of the Company (the "Board") believes that
it is in the best interests of the Company to encourage the Employee's continued
employment with and dedication to the Company; and
WHEREAS, the Compensation Committee of the Board has adopted a policy which
authorizes the Company to enter into this Agreement with the Employee; and
WHEREAS, the parties desire to enter into this Agreement setting forth the
terms and conditions for the payment of compensation to the Employee in the
event of a termination of the Employee's employment during the term of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements of the parties contained herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. TERM. The initial term of this Agreement shall be for a period
commencing on May 6, 2002 and will remain in effect until May 6, 2004. This
Agreement may be renewed by written agreement of the parties. References herein
to the term of this Agreement shall include the initial term and any additional
period for which this Agreement is extended or renewed.
2. TERMINATION OF EMPLOYMENT. Subject to the terms of this Agreement, the
Employee shall be entitled to receive severance payments from the Company for
services previously rendered to the Company and its affiliates in the event the
Employee's employment is terminated by the Company other than for Cause (as
defined in Section 7) or by the Employee for Good Reason
(as defined in Section 8). "Date of Termination" means the Employee's date of
termination of employment with the Company and its affiliates.
(a) GOOD REASON; OTHER THAN FOR CAUSE.
If, during the term of this Agreement the Company terminates the
Employee's employment other than for Cause or the Employee terminates employment
with the Company for Good Reason:
(i) the Company shall pay to the Employee the following amounts,
subject to the execution by the Employee of a waiver and release agreement,
substantially in the form attached hereto as Exhibit A, in favor of the
Company and its affiliates:
A. the sum of (1) the Employee's Annual Base Salary (as
defined in Section 6) through the Date of Termination to the extent
not theretofore paid and (2) any accrued vacation pay, to the extent
not theretofore paid, (the sum of the amounts described in clauses (1)
and (2) shall be hereinafter referred to as the "Accrued Obligations")
in a lump sum in cash within 30 days of the Date of Termination; and
B. an amount equal to 1.5 times the sum of: (x) the Employee's
Annual Base Salary and (y) the Target Bonus. This amount is to be paid
in substantially equal proportionate installments in accordance with
the Company's normal payroll practices, commencing with the first
payroll period in the month following the month in which the Date of
Termination occurs, for a period of one and one-half years.
(ii) for one and one-half year after the Date of Termination, or
such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue to provide at
Company expense benefits to the Employee and/or the Employee's family at
least equal to those which would have been provided to them in accordance
with the welfare benefit plans, practices, policies and programs provided
by the Company and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and programs) to the
extent applicable generally to other peer employees of the Company and its
affiliated companies, as if the Employee's employment had not been
terminated; provided, however, that if the Employee becomes reemployed with
another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the medical and other
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welfare benefits described herein shall be secondary to those provided
under such other plan during such applicable period of eligibility; and
(iii) the Company shall, at its sole expense as incurred, provide
the Employee with outplacement services the scope and provider of which
shall be at the highest level provided by the Company to its peer
employees.
(b) CAUSE; OTHER THAN FOR GOOD REASON. If the Employee's employment is
terminated for Cause during the term of this Agreement, this Agreement shall
terminate without further obligations to the Employee, other than the obligation
to pay to the Employee his Accrued Obligations to the extent theretofore unpaid.
If the Employee voluntarily terminates employment during the term of this
Agreement, excluding a termination for Good Reason, this Agreement shall
terminate without further obligations to the Employee, other than for Accrued
Obligations through the Date of Termination.
3. EFFECT ON OPTION AND RESTRICTED AGREEMENTS. Immediately prior to
(i) a termination of the Employee's employment during the term of this Agreement
that is subject to Section 2(a) hereof, all stock option and restricted stock
grants made to the Employee by Company which are outstanding at the time of such
event shall become fully vested. In addition, the Employee shall have until the
earlier of (i) two years following the Date of Termination and (ii) the
expiration date of the options to exercise the outstanding options. This
Agreement is intended to amend all stock option and restricted stock grants
previously awarded to the Employee to accelerate vesting and to provide an
extended exercise period as described above to the extent that the terms of the
grants are inconsistent with this Section 3.
4. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. In the event that it is
determined that any payment or distribution of any type to or for the benefit of
the Employee made by the Company, by any of its affiliates, by any person who
acquires ownership or effective control or ownership of a substantial portion of
the Company's assets (within the meaning of section 280G of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder (the "Code")) or by any
affiliate of such person, whether paid or payable or distributed or
distributable pursuant to the terms of an employment agreement or otherwise (the
"Total Payments"), would be subject to the excise tax imposed by section 4999 of
the Code or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest or penalties, are collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to receive
an additional payment (an "Excise Tax Restoration Payment") in an amount that
shall fund the payment by the Employee of any Excise Tax on the Total Payments
as well as all income taxes imposed on the
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Excise Tax Restoration Payment, any Excise Tax imposed on the Excise
Tax Restoration Payment and any interest or penalties imposed with respect to
taxes on the Excise Tax Restoration or any Excise Tax.
5. AGREEMENTS OF EMPLOYEE AND COMPANY.
(a) CONFIDENTIAL INFORMATION. The Employee shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliates,
and their respective businesses, which shall have been obtained by the Employee
during the Employee's employment by the Company or any of its affiliates and
which shall not be or become public knowledge (other than by acts by the
Employee or representatives of the Employee in violation of this Agreement).
After termination of the Employee's employment with the Company, the Employee
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it.
(b) NO DISPARAGEMENT. The Employee and the Company agree that,
subsequent to the effective date of this Agreement, they will not make any
disparaging or derogatory remarks or comments about the other, and the Employee
agrees that he shall not make any disparaging or derogatory remarks or comments
about the Company's current and former officers, directors, shareholders,
principals, attorneys, agents or employees, or his employment with the Company.
(c) COOPERATION. In the event that the Company is involved in any
investigation, litigation, or administrative proceeding subsequent to the
effective date of this Agreement, the Employee agrees that, upon request, he
will provide reasonable cooperation to the Company and its attorney in the
prosecution or defense of any investigation, litigation, or administrative
proceeding, including participation in interviews with the Company's attorneys,
appearing for depositions, testifying in administrative or judicial proceedings,
or any other reasonable participation necessary for the prosecution or defense
of any subject investigation, litigation, or administrative proceeding. The
Company agrees to reimburse the Employee for reasonable expenses in
participating in the prosecution or defense of any investigation, litigation or
administrative proceeding.
(d) RETURN OF PROPERTY. The Employee agrees that upon his
separation of employment from the Company that he will surrender to the Company
all Company property, including, but not limited to, any and all confidential
information, licenses, trademarks, patents, in written, electronic or
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other tangible form. In addition, the Employee agrees to return any and all
computer equipment with passwords, Company issued credit, security,
identification, or telephone cards, with passwords, and all other Company owned
property and keys, contemporaneously with providing the proper means for
accessing the property.
6. DEFINITION OF "ANNUAL BASE SALARY" AND "ANNUAL BONUS". Annual base
salary ("Annual Base Salary") means the annual base salary payable to the
Employee immediately prior to his promotion to Acting CEO and shall not include
any promotional increase provided as a result of acceptance of the interim
position, but shall not be less than $265,000. Target bonus (the "Target Bonus")
means 25% of the annual base salary as defined above.
7. DEFINITION OF "CAUSE". For purposes of this Agreement, "Cause" for
termination of the Employee's employment by the Company hereunder shall be
deemed to exist if (a) the Employee is found guilty by a court of having
committed fraud or theft against the Company or having committed a felony
involving moral turpitude; (b) the Employee is found guilty by a court of having
committed a crime involving moral turpitude; (c) in the reasonable judgment of
the Board, the Employee has compromised trade secrets or other similarly
valuable proprietary information of the Company; or (d) in the reasonable
judgment of the Board, the Employee has engaged in gross misconduct that causes
material harm to the business and operations of the Company or any of its
affiliated companies, the continuation of which will continue to materially harm
the business and operations of the Company or any of its affiliated companies in
the future.
8. DEFINITION OF "GOOD REASON". "Good Reason" shall mean, without the
consent of the Employee, any of the following: (1) any proposed reduction in the
Employee's base salary, fringe benefits or bonus eligibility, except, in the
case of fringe benefits or bonus eligibility, in connection with a reduction in
such compensation generally applicable to peer employees of the Company; (2) the
Employee has his responsibilities or areas of supervision with the Company
substantially reduced; (3) the Employee has his responsibilities or areas of
supervision with the Company substantially increased without an appropriate
increase in Employee's compensation; or (4) the Employee is required to move his
office more than 50 miles outside the metropolitan area in which the office of
the Employee was located immediately prior to the move.
9. EXPENSES. The Company shall pay any and all reasonable legal fees
and expenses incurred by the Employee in seeking to obtain or enforce, by
bringing an action against the Company, any right or benefit
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provided in this Agreement if the Employee is successful in whole or in part in
such action.
10. WITHHOLDING. Notwithstanding anything in this Agreement to the
contrary, all payments required to be made by the Company hereunder to the
Employee or his estate or beneficiaries shall be subject to the withholding of
such amounts relating to taxes as the Company reasonably may determine it should
withhold pursuant to any applicable law or regulation. In lieu of withholding
such amounts, in whole or in part, the Company may, in its sole discretion,
accept other provisions for the payment of taxes and any withholdings as
required by law, provided that the Company is satisfied that all requirements of
law affecting its responsibilities to withhold compensation have been satisfied.
11. NO DUTY TO MITIGATE. The Employee's payments received hereunder
shall be considered severance pay in consideration of past service, and pay in
consideration of continued service from the date hereof and entitlement thereto
shall not be governed by any duty to mitigate damages by seeking further
employment.
12. AMENDMENTS OR ADDITIONS; ACTION BY BOARD OF DIRECTORS. No
amendments or additions to this Agreement shall be binding unless in writing and
signed by both parties hereto. The prior approval by the Board shall be required
in order for the Company to authorize any amendments or additions to this
Agreement.
13. GOVERNING LAW. This Agreement shall be governed by the laws of
United States to the extent applicable and otherwise by the laws of the State of
Indiana, excluding the choice of law rules thereof.
14. ASSIGNMENT. The rights and obligations of the Company under this
Agreement shall be binding upon its successors and assigns and may be assigned
by the Company to the successors in interest of the Company. The rights and
obligations of the Employee under this Agreement shall be binding upon his
heirs, legatees, personal representatives, executors or administrators. This
Agreement may not be assigned by the Employee, but any amount owed to the
Employee upon his death shall inure to the benefit of his heirs, legatees,
personal representatives, executors, or administrators.
15. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when hand delivered, sent by overnight courier,
or mailed by first-class, registered or certified mail, return
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receipt requested, postage prepaid, or transmitted by telegram, telecopy, or
telex, addressed as follows:
If to the Company:
Wabash National Corporation
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: V.P. Human Resources
Fax: 765/000-0000
If to the Employee:
Xxxxxxx X. Xxxxxxxx
or to such other 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.
16. OTHER AGREEMENTS. This Agreement may not constitute the entire
agreement between the parties hereto providing for severance payments in
connection with a termination of employment; provided, however, that if the
Employee is entitled to severance payments pursuant to this Agreement and
pursuant to any other oral or written agreements, commitments or understandings
calling for severance payments in connection with a termination of employment,
the severance payments paid to the Employee by the Company in connection with
such termination of employment shall be limited to the greater of (i) severance
payments provided pursuant to this Agreement or (ii) severance payments provided
by the Company pursuant to such other oral or written agreements, commitments or
understandings.
17. SEVERABILITY. If any part of any provision of this Agreement shall
be invalid or unenforceable under applicable law, such part shall be ineffective
to the extent of such invalidity or unenforceability only, without in any way
affecting the remaining parts of such provision or the remaining provisions of
this Agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement, or have caused this Agreement to be executed and delivered, to be
effective as of May 6, 2002.
WABASH NATIONAL CORPORATION
Date: 5/6/02 By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
Title: Director, Chairman of the Board
EMPLOYEE
Date: 5/6/02 /s/ XXXXXXX X. XXXXXXXX
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EXHIBIT A:
FORM OF WAIVER AND RELEASE AGREEMENT
In consideration of the severance pay provided to me by Wabash
National Corporation ("Wabash"), which severance pay is described in the
Severance Agreement between me and the Company effective May 6, 2002 (the
"Severance Payment") and is a payment I would not be entitled to without
entering into this Waiver and Release Agreement, I voluntarily enter into this
Waiver and Release Agreement. More specifically, the Severance Payment that is
the consideration for this Waiver and Release Agreement is a payment of Four
Hundred Ninety Six Thousand Eight Hundred Seventy Five Dollars and Zero Cents
($496,875.00) representing the entire Severance Payment.
I, on my own behalf and on behalf of my heirs, executors,
administrators, attorneys and assigns, hereby unconditionally and irrevocably
release, waive and forever discharge Wabash and each of its affiliates, parents,
successors, predecessors, and the subsidiaries, directors, owners, members,
shareholders, officers, agents, and employees of Wabash and its affiliates,
parents, successors, predecessors, and subsidiaries (collectively all of the
forgoing are referred to as the "Employer"), from any and all causes of action,
claims and damages, including attorneys' fees, whether known or unknown,
foreseen or unforeseen, presently asserted or otherwise arising through the date
of my signing of the Waiver and Release Agreement, concerning my employment or
separation from employment. This release includes, but is not limited to, any
claim or entitlement to salary, bonuses, any other payments, benefits or damages
arising under any federal law (including but not limited to, Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee
Retirement Income Security Act of 1974, the Americans with Disabilities Act, and
the Family and Medical Leave Act, each as amended); any claim arising under any
state or local ordinances or regulations, and any claim arising under any common
law principle or public policy, including but not limited to all suits in tort
or contract, such as, wrongful termination, defamation, emotional distress,
invasion of privacy or loss of consortium.
I understand that by signing this Waiver and Release Agreement I am
not waiving any claims or administrative charges which cannot be waived by law.
I am waiving, however, any right to monetary recovery or individual relief
should any federal, state or local agency (including the Equal Employment
Opportunity Commission (the "EEOC")) pursue any claim on my behalf arising out
of or related to my employment with and/or separation from employment with the
Employer.
I further agree, without any reservation whatsoever, never to xxx the
Employer or become a party to a lawsuit on the basis of any and all claims of
any type lawfully and validly released in this Waiver and Release Agreement. If
I xxx in violation of the preceding sentence of this Waiver and Release
Agreement, I will (1) pay all costs and expenses incurred by the Employer in
defending against a suit or enforcing this Waiver and Release Agreement,
including litigation and court costs, expenses and reasonable attorneys' fees,
and (2) I will repay the Severance Payment I received in consideration for this
Waiver and Release Agreement.
I am signing this Waiver and Release Agreement knowingly and
voluntarily. I acknowledge that:
(1) I am hereby advised in writing to consult an attorney before signing
this Waiver and Release Agreement;
(2) I have relied solely on my own judgment and/or that of my attorney
regarding the consideration for and the terms of this Waiver and
Release Agreement and am signing this Waiver and Release Agreement
knowingly and voluntarily of my own free will;
(3) I am not entitled to the Severance Payment amount unless I agree to
and honor the terms of this Waiver and Release Agreement.
(4) I have been given at least twenty one (21) days to consider this
Waiver and Release Agreement;
(5) I may revoke this Waiver and Release Agreement within seven (7) days
after signing it by submitting a written notice of revocation to
Wabash to Xxxx Xxxxxxxx, Vice President Human Resources, WABASH
NATIONAL CORPORATION, X.X. Xxx 0000, Xxxxxxxxx, XX 00000 prior to 5:00
pm on the seventh day after signing it. I further understand that this
Waiver and Release Agreement is not effective or enforceable until
after the seven (7) day period of revocation has expired without
revocation, and that if I revoke this Waiver and Release Agreement, I
will not receive any Severance Payment. THIS WAIVER AND RELEASE
AGREEMENT DOES NOT BECOME EFFECTIVE UNTIL THE EXPIRATION OF THE SEVEN
DAY PERIOD;
(6) I have read and understand the Waiver and Release Agreement and
further understand that it includes a general release of any and all
known and unknown, foreseen or unforeseen, claims presently asserted
or otherwise arising through the date of my
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signing of this Waiver and Release Agreement that I may have against
the Employer; and
(7) I understand that this Waiver and Release Agreement does not waive any
age discrimination claims that may arise after the effective date of
this Waiver and Release Agreement.
(8) No statements or conduct by the Employer have in any way coerced or
unduly influenced me to execute this Waiver and Release Agreement.
I represent and promise that prior to the execution of this Waiver and
Release Agreement I have surrendered to the Company all Company property,
including, but not limited to, any and confidential information, licenses,
trademarks, patents, in written, electronic or other tangible form. In addition,
I have returned any and all computer equipment with passwords, Company issued
credit, security, identification, or telephone cards, with passwords, and all
other Company owned property and keys, contemporaneously with providing the
proper means for accessing the property.
I further agree that I will not make any disparaging or derogatory
remarks or comments about the Company or the Company's current and former
officers, directors, shareholders, principals, attorneys, agents or employees,
or my employment with the Company.
I further acknowledge that there are no other agreements of any nature
between the Employer and me with respect to the matters discussed in this Waiver
and Release Agreement, except as expressly stated herein, and that in signing
this Waiver and Release Agreement, I am not relying on any agreements or
representation, except those expressly contained in this Waiver and Release
Agreement and the Severance Agreement.
I further acknowledge and agree that if any provision of this Waiver
and Release Agreement is found, held or deemed by a court of competent
jurisdiction to be void, unlawful or unenforceable under any applicable statute
or controlling law, the remainder of this Waiver and Release Agreement shall
continue in full force and effect.
This Waiver and Release Agreement is deemed made and entered into in
the State of Indiana, and in all respects shall be interpreted, enforced and
governed under applicable federal law, and in the event that any reference shall
be made to state law, the internal laws of the Indiana shall apply. Any
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disputes under this Waiver and Release Agreement shall be adjudicated by a court
of competent jurisdiction in the State of Indiana.
This Waiver and Release Agreement shall not in any way be construed as
an admission by the Company of any liability for any claim or potential claim.
I understand that, to receive the Severance Payment amount, I must
sign and return this Waiver and Release Agreement no sooner than my employment
termination date and no later than twenty one (21) days from the date my
employment was terminated.
EXECUTED on this 24th day of May, 2002 at Lafayette Indiana.
/s/ XXXXXXX X. XXXXXXXX
-----------------------
XXXXXXX X. XXXXXXXX
STATE OF Indiana
CITY/ COUNTY OF Xxxxxx
The foregoing instrument was acknowledged before me in the indicated
jurisdiction this 24 day of May, 2002, by Xxxxxxx X. Xxxxxxxx.
My commission expires: 1/31/08
/s/ XXX XXXXXXX
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Notary Public
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