SEPARATION AGREEMENT
This is a Separation Agreement dated as of April 18, 2000 between Fort
Xxxxx Operating Company, its parent, affiliates, subsidiaries, predecessors,
successors and assigns (collectively "Fort Xxxxx" or the "Company") and Xxxxxx
X. Xxxxxx ("Xxxxxx").
X. Xxxxxx has been employed by Fort Xxxxx as Senior Vice President &
Treasurer under his employment agreement dated as of June 6, 1997 (the
"Employment Agreement"). Fort Xxxxx and Xxxxxx have agreed on the terms under
which he will terminate his employment with the Company. The parties desire to
resolve matters involving Xxxxxx'x employment, the Employment Agreement and
Xxxxxx'x separation from employment with Fort Xxxxx.
X. Xxxxxx and Fort Xxxxx further desire to settle, resolve and release
any and all existing or potential claims, controversies, differences, disputes
or disagreements, known or unknown, that Xxxxxx may have with Fort Xxxxx in
exchange for Fort Xxxxx' agreement to provide Xxxxxx certain compensation and
benefits to which he otherwise may not be entitled.
C. Fort Xxxxx also desires to provide Xxxxxx with additional
compensation in return for Xxxxxx agreeing (i) not to compete against Fort
Xxxxx, (ii) not to hire Fort Xxxxx employees and (iii) to cooperate with Fort
Xxxxx.
THEREFORE, in consideration of the above premises and the mutual
covenants and promises contained herein, Xxxxxx and Fort Xxxxx agree as follows:
1. Termination of Employment. Xxxxxx agrees to voluntarily
terminate his employment effective at the close of business on August 13, 2000
(his "Date of Termination"). He will be paid all of his regular compensation and
benefits through that date. In addition, Xxxxxx agrees to relinquish effective
on the date hereof his rights in restricted shares of the Company, and in
consideration therefore, the Company agrees to pay Xxxxxx an amount equal to the
equivalent value of 4,234 shares of common stock of the Company on August 13,
2000, with the value of the shares of common stock being determined by averaging
the high and low price of the common stock or the New York Stock Exchange on
such date. Fort Xxxxx shall pay such amount to Xxxxxx on or before August 31,
2000.
2. Severance Payments. Fort Xxxxx shall pay Xxxxxx the amount
of $847,826.00 representing two (2) times the sum of (i) his current base salary
and (ii) his 1998 Management Incentive Bonus. This amount shall be paid as
follows: $423,913.50 on August 14, 2000 and $423,913.50 on August 12, 2001.
Notwithstanding the preceding sentence, if an investor or investor group
acquires more than fifty percent (50%) of the Company's voting common stock or
if Miles X. Xxxxx is no longer CEO of Fort Xxxxx, the Company agrees to pay
Xxxxxx within thirty (30) days after a shareholder files a report with the
Securities and Exchange Commission reporting such ownership or after Miles X.
Xxxxx ceases to be CEO the full amount of any unpaid payments as provided in the
preceding sentence.
3. MIP Bonus Payments. Fort Xxxxx shall pay Xxxxxx,on
August 14, 2000, $114,798.74 representing his bonus under the 2000 Management
Incentive Plan.
4. Pension and Other Benefits.
(a) All Company provided medical, prescription and
dental coverage and life insurance (including the split dollar life insurance
currently provided to Xxxxxx) in which Xxxxxx is currently enrolled shall be
provided to Xxxxxx and eligible members of his family for two (2) years
following August 13, 2000, to the extent provided in his Employment Agreement.
(b) Xxxxxx is the beneficiary of 7,620 performance
shares issued pursuant to the 1996 Stock Incentive Plan (the "Plan"). Xxxxxx
agrees to relinquish all right to the performance shares as of August 13, 2000.
(c) The Company will pay Xxxxxx, on August 14, 2000,
in a lump sum $13,554.54 equal to his interest in the Fort Xxxxx Salaried
Employees Retirement Plan and related additional SERP.
(d) Nothing herein shall forfeit or otherwise affect
Xxxxxx'x right to vested benefits in the Fort Xxxxx 401(k) Plan and related
SERP, which benefits shall be paid to Xxxxxx according to such plan.
(e) Xxxxxx shall not be entitled to any other
bonus payments or profit sharing awards including any additional payments under
the Management Incentive Plan.
(f) All payments referred to herein are gross
payments from which Fort Xxxxx xxx withhold legal and authorized amounts for
payment to taxing authorities as required by law.
(g) The Company shall pay Xxxxxx, on August 14, 2000,
$7,000 for tax advice and tax preparation expenses.
(h) The Company will pay Xxxxxx, on August 14, 2000,
$17,414.68 representing the mortgage buydown on his Lake Forest, Illinois
residence.
(i) The Company will reimburse Xxxxxx for reasonable
legal expenses in connection with the negotiation of this Separation Agreement,
not to exceed $2,500. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which Xxxxxx may reasonablyn incur
as a result of any contest (regardless of the outcome thereof) by the Company,
Xxxxxx or others of the validity or enforceability of, or liability under, any
provision of the Employment Agreement or this Separation Agreement or any
guarantee of performance thereof (including as a result of any contest by Xxxxxx
about the amount of any payment pursuant to this Agreement),plus in each case
interest on any delayed payment at the applicable Federal rate provided for in
Section 7872 (f) (2) (A) of the Internal Revenue Code of 1986, as amended (the
"Code").
(j) Unless exercised, Xxxxxx'x options to purchase
60,000 shares granted on January 6, 1998 and 10,000 shares granted on January 6,
1999 shall expire on his Date of Termination.
5. Method of Payment. All cash payments required by this
Agreement shall be made by wire transfer to Xxxxxx'x account or accounts which
he shall designate in writing to the Company's Senior Vice President, General
Counsel. Such transfers shall be authorized and released in advance so as to
arrive in Xxxxxx'x account(s) by applicable due dates.
6. General Release.
(a) In consideration of all payments due him hereunder or
under the Employment Agreement, Xxxxxx hereby agrees, for himself, his
successors, heirs, representatives, executors, agents and assigns, to release
and forever discharge Fort Xxxxx, including its affiliates, subsidiaries,
parents, predecessors, successors and assigns and their respective directors,
officers, employees and agents thereof from any and all claims, debts,
responsibilities and liabilities of every kind and character whatsoever, known
or unknown, suspected or unsuspected, which he has ever had or may have against
Fort Xxxxx, including but not limited to, any and all claims arising out of
Xxxxxx'x employment or termination of employment with Fort Xxxxx. Xxxxxx
acknowledges that this Release includes any and all claims whether in contract
or in tort, claims that may be brought on his behalf by others, claims brought
before any court or administrative agency, or claims under any national,federal,
state or local statute or ordinance, including any claims under Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act or any other law.
It is acknowledged that this Separation Agreement does not
release Xxxxxx'x right to any vested benefits in the Fort Xxxxx Corporation
StockPlus Plan (the "StockPlus Plan") and related SERP. Xxxxxx'x eligibility for
benefits in the StockPlus Plan will be controlled by the terms of the plan.
(b) Fort Xxxxx, including its affiliates, subsidiaries,
parents, predecessors, successors and assigns and their respective directors,
officers, employees and agents thereof hereby release and forever discharge
Xxxxxx, his successors, heirs, representatives, executors, agents and assigns
from any and all claims, which it has ever had or may have against Xxxxxx or any
of the foregoing persons, arising out of (x) Xxxxxx'x employment or termination
of employment with Fort Xxxxx or (y) any event, condition or circumstance that
existed or arose on or prior to the Date of Termination. The foregoing release
will not apply to Xxxxxx'x obligations under this Separation Agreement. Fort
Xxxxx acknowledges that this Release includes all claims whether in contract or
in tort, claims that may be brought on its behalf by others, claims brought
before any court or administrative agency, or claims under any national,
federal, state or local statute or ordinance.
7. Special Release Notification. This Separation Agreement
includes a release of all claims under the Age Discrimination in Employment Act,
("ADEA"), and, therefore, pursuant to the requirements of the ADEA, Xxxxxx
acknowledges that he has been advised (1) that this release includes but is not
limited to, all rights or claims arising under the ADEA up to and including the
date of execution of this release, but does not waive rights or claims that may
arise after the date of execution; (2) to consult with an attorney or other
advisor of his choosing concerning his rights and obligations under this
release; (3) to fully consider this release before executing it, and that he has
been offered at least twenty-one (21) days to do so; (4) that this release shall
become effective and enforceable seven (7) days following execution of this
Separation Agreement, during which seven (7) day period Xxxxxx understands that
he may revoke his acceptance of this Separation Agreement by delivering written
notice to Xxxxxxxx X. Xxxxxxxx, XX, Senior Vice President and General Counsel,
Fort Xxxxx Corporation, 0000 Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000.
8. Post Employment Restrictions, Obligations
(a) Xxxxxx agrees to comply with the terms of his
Confidentiality Agreement executed as part of his Employment Agreement and not
to otherwise use or disclose Fort Xxxxx confidential information in the future.
(b)In return for the payment of the amounts on August 14,
2000 as set forth in Section 2, Xxxxxx agrees, in order to protect the Company's
goodwill, trade secrets and confidential information and thereby help ensure the
long-term success and development of the business, not to engage in competitive
activities on behalf of a competitive business for a period of two (2) years
following the Date of Termination with the Company for whatever reason, without
first obtaining written permission from either the Senior Vice President and 3
General Counsel or the Senior Vice President, Human Resources, which shall not
be unnecessarily withheld or delayed. "Engage in competitive activities" means
rendering services or being involved directly or indirectly in any way or in any
capacity whether as an officer, director, employee, agent, owner, shareholder or
consultant (excluding ownership of less than 5% of the stock of a publicly
traded company), in the manufacture, development, promotion or sale of any towel
or tissue product or tabletop product of the type manufactured by Fort Xxxxx
(the "Covered Products"). A "competitive business" means any person or entity
engaged in the manufacture or non-retail sale of the Covered Products. Xxxxxx
acknowledges that products of the Company are sold throughout North America and
Western Europe. Accordingly, the geographic area covered by this restraint shall
include any county, city, town, province or comparable unit of local government
where the Covered Products are manufactured, marketed or sold by the Company.
The parties agree that this non-compete provision supersedes all prior
agreements between them on this subject.
(c) Xxxxxx agrees to favorably represent the Company and
to cooperate in the transition of his responsibilities to his successor.
(d) Xxxxxx agrees for a period of two (2) years not to
solicit directly or indirectly for employment any employee or former employee of
Fort Xxxxx or its affiliates, as of January 1, 2000, without the written consent
of the Senior Vice President, Human Resources for the Company, which shall not
be unreasonably withheld or delayed. Further, Xxxxxx agrees that if any such
Fort Xxxxx employee approaches him for employment, he will refer them to the
appropriate hiring official of his employer and will have no involvement either
in the hiring of the employee or in working with the employee should such
employee work for the same company for which Xxxxxx works.
(e) Xxxxxx agrees that as Senior Vice President & Treasurer
he possesses intimate knowledge about all aspects of the Company's business,
business plans and other confidential or propriety information. He also agrees
that these restrictions are reasonable and necessary to protect the Company's
business and in consideration of the substantial benefits provided him
hereunder. If Xxxxxx violates any of his obligations under this paragraph 8, the
Company shall have no further obligation to him under this Agreement as on the
date of breach. Xxxxxx agrees that the Company will be irreparably harmed and
will be entitled to immediate injunctive relief in the event of such breach in
addition to any other monetary remedies.
(f) If any aspect of the above post employment
restrictions are deemed void or unenforceable by any court of competent
jurisdiction, the parties agree that the court should modify these restrictions
to a point they would be enforceable and enforce the restrictions to that
extent.
9. Indemnity. Fort Xxxxx agrees to continue to indemnify and
save Xxxxxx harmless from all claims, actions and liabilities which may arise in
connection with his reasonable performance of his duties for the Company. Such
indemnification shall be to the same extent as its indemnification of active
executives of equal rank but shall relate only to Xxxxxx'x alleged actions or
failure to act during the period in which he was employed by the Company.
10. Future Cooperation. Xxxxxx agrees to cooperate
in providing transition assistance related to his departure as may be reasonably
required of him by Fort Xxxxx, including presences as a witness in legal
proceedings as may be necessary, both before and after his Date of Termination.
11. Resignation. By his signature hereto, Xxxxxx hereby
resigns his position as Senior Vice President & Treasurer and any and all other
positions with the Company, its subsidiaries, its parent and its affiliates;
provided, however, Xxxxxx shall remain employed as provided in Paragraph 1 until
the Date of Termination.
12. Confidentiality. Xxxxxx agrees that he will not divulge
the contents of this Separation Agreement which are agreed to be confidential in
nature except (a) Xxxxxx may divulge the contents to his spouse, attorney,
financial advisor and income tax preparer; or (b) except as may be required to
comply with legal process. It is further agreed by Xxxxxx that if it is
necessary that this Agreement or a significant portion be disclosed to those
listed above, Xxxxxx agrees to instruct and request each of them, or use such
other efforts as may be reasonable, to keep any information so disclosed
confidential. If Xxxxxx materially breaches this provision, the Company will
have no further obligation to him under this Agreement.
13. Entire Agreement. Xxxxxx understands and agrees that all
terms of this Separation Agreement are contractual and are not a mere recital.
The parties represent and warrant that in negotiating and executing this
Separation Agreement, each have had an opportunity to consult with legal counsel
or other representatives of their own choosing concerning the meaning and effect
of each term or provision hereof, and that there are no representations,
promises or agreements other than those specifically referred to or set forth in
writing herein.
The parties represent and warrant that they have read this
Separation Agreement in its entirety, fully understand and agree to its term and
provisions, and intend and agree that it is a final and legal binding settlement
and release of all claims Xxxxxx or Fort Xxxxx xxx have.
15. Severability. If any portions of this Separation Agreement
are void or deemed unenforceable for any reason, the unenforceable portions
shall be deemed severed from the remaining portions of this Agreement which
shall otherwise remain in full force and effect.
16. No Waiver. The decision of either party not to assert a
claim for breach of the Separation Agreement shall not be construed as a waiver
of that or any subsequent breach which might occur.
17. Corporate Authority. The officer executing this Separation
Agreement on behalf of Fort Xxxxx represents that he has full corporate
authority to do so and to bind the Company, its parents, affiliates,
subsidiaries, predecessors, successors and assigns.
18. Governing Law. This Agreement shall be governed and
construed according to the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the parties have affixed their signatures:
By:/s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
FORT XXXXX OPERATING COMPANY
By:/s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Senior Vice President
