SEVERANCE AGREEMENT AND RELEASE
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THIS SEVERANCE AGREEMENT and RELEASE ("Agreement") is entered
into between Xxxxx Xxxxxxx ("the Executive') and Foamex International Inc.,
Foamex L.P., Foamex Carpet Cushion L.L.C. and all other affiliates and
subsidiaries of Foamex International Inc. (collectively "Foamex"). The Executive
and Foamex are entering into this Agreement because the Executive's employment
with Foamex is terminating and the parties (a) wish to define the terms of the
Executive's separation from employment, and (b) wish to amicably resolve any and
all claims and disputes which have been (or could have been) asserted by the
Executive against Foamex. The Executive and Foamex agree that termination of the
Executive's employment is for legitimate business reasons. This Agreement will
supercede any previous Agreements between the parties, except as otherwise set
forth in this Agreement.
Specific terms and conditions:
1. Termination of Employment. The Executive's last day of work shall be
October 31, 2002, which shall be defined as the "Termination Date".
2. Severance Payment Program. As part of the consideration for this
Agreement the Executive will receive a total of $815,000 (eight hundred fifteen
thousand dollars) (less applicable taxes and withholdings) to be paid as
follows:
o $115,000 (one hundred fifteen thousand dollars) to be paid in a lump
sum within seven days of the date this agreement is executed.
o $300,000 (three hundred thousand dollars) to be paid in 26 equal
payments of $11,538.47 (eleven thousand five hundred thirty eight
dollars and 47 cents) in accordance with the normal Foamex salaried
payroll calendar beginning the Termination Date.
o $300,000 (three hundred thousand dollars) to be paid in 52 equal
payments of $5,769.23 (five thousand seven hundred sixty nine dollars
and twenty three cents) in accordance with the normal Foamex salaried
payroll calendar beginning one year from the Termination Date.
o $100,000 (one hundred thousand dollars) to be paid in 26 equal payments
of $3,846.15 (three thousand eight hundred forty six and fifteen cents)
in accordance with the normal Foamex salaried payroll calendar
beginning three years from the Termination Date.
3. Supplemental Benefits. For a forty-eight (48) month period beginning on
the Termination Date, the Executive also will receive continued medical and
dental coverage consistent with that which will be available to Foamex employees
over the next 48 months. The Executive will be required to make the normal
employee contribution to medical benefits on a monthly basis during this
48-month period and will be responsible for all co-payments that will be
associated with the medical and dental coverage provided to Foamex employees.
All other benefits will terminate on the Termination Date.
4. Stock Options. As additional consideration for this Agreement the
Executive will retain the right to exercise his vested stock options for a
period of forty-eight months 48-
months from the termination date. The vested stock options referenced in this
Section 4 are set forth on Schedule A attached hereto and made apart hereof by
reference.
5. Out-Placement Services. The Company will provide the Executive with
outplacement services with Right Management Consultants in their
Professional/Management services plan for a period of six months beginning from
date of execution of this agreement.
6. Non-Competition. For a period of 48 months beginning on the Termination
Date the Executive shall not for any reason, either directly or indirectly,
participate, engage, or have a financial interest in a "National Competing Foam
Business". For purposes of this Agreement, a "National Competing Foam Business"
is defined as any individual, corporation, partnership entity, and/or other form
of business, which manufactures or distributes products identical or similar to
those manufactured, sold and/or otherwise distributed by Foamex during the
Executive's tenure with Foamex and which has more than one foam manufacturing
facility (not including regional foam fabrication facilities associated with the
manufacturer) such as, but not limited to Xxxxxxxxx, Hickory Springs, Flexible,
Xxxxxxx & Xxxxx and Vita Foam. In the event the Executive is employed by or has
a financial interest in a customer of Foamex the Executive agrees not to cause a
diminution of the Foamex supply position with that customer. The Executive
agrees that the time period and geographic scope of this Non-Competition
obligation are reasonable and proper.
7. No Solicitation. For a period of 48 months beginning on the Termination
Date, the Executive agrees that he will not directly or indirectly solicit or
encourage Foamex employees to terminate their employment with Foamex, and/or to
become employed by or work with the Executive or any third party. Except as
permitted in section 5, during this period, the Executive also agrees that he
will not interfere in any way with Foamex's business relationships with its
customers, suppliers, vendors, representatives, agents and/or employees.
8. Confidential Corporate Information. The Executive will maintain the
confidentiality of Foamex's Confidential Corporate Information and will not
disclose Confidential Corporate Information to anyone at any time. "Confidential
Corporate Information" as used in this Agreement means: (i) confidential,
proprietary, commercially-sensitive, or otherwise secret information, knowledge,
data analyses, or reports concerning the Company's businesses, legal affairs,
products, services, methods, customers, customer-related information, budgets,
finance, financial reports and financial projections, data and programs,
computer software and management information systems, marketing strategies and
forecasts, personnel, prices, costs, business plans, purchasing, research and
development, data processing, engineering, inventions, improvements,
discoveries, innovations, and ideas, whether potentially subject to a patent or
not; (ii) nonpublic information about mergers, acquisitions, securities
offerings, or other transactions involving Foamex; (iii) information bearing the
legend or conspicuously marked as "Confidential" or "Proprietary," or language
of like import; and (iv) all other information that a reasonable employee would
regard as confidential, proprietary, commercially-sensitive or secret.
Confidential Corporate Information also includes such information for
subsidiaries or other affiliates of Foamex. Confidential Corporate Information
may be in a tangible or intangible form, and communicated visually, orally, in
writing, or
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electronically. Confidential Corporate Information does not include information
that is, or becomes, available to the public generally.
9. Acknowledgment of Non-Competition and No Solicitation and
Confidentiality Provisions. The Executive expressly acknowledges and agrees that
he (a) understands the scope and meaning of the restrictions set forth in
sections 6, 7, and 8 of this Agreement, (b) agrees that they are necessary and
reasonable to protect Foamex's legitimate interests, (c) agrees that he has been
well compensated though this Agreement for agreeing to these restrictions, and
(d) agrees that these restrictions will not prevent him from engaging in gainful
and meaningful employment. Failure to comply with any term set forth in section
6, 7, or 8 of this Agreement will result in the Executive's forfeiture of the
severance payment program set forth in paragraph 1 above. Failure to comply with
any term set forth in sections 6, 7, or 8 of this Agreement would be a material
breach of this Agreement and would create irreparable harm for Foamex.
Consequently, the Executive agrees that Foamex shall have (in addition to any
claim for damages) the right to equitable relief, including but not limited to,
specific performance and injunctive relief for violations of sections 6, 7,
and/or 8 of this Agreement, The Executive further agrees that the existence of
any claim or cause of action he may have against Foamex, other than Foamex's
obligation for compensation as described in Section 2, 3 & 4 of this agreement,
shall not constitute a defense to the enforcement by Foamex of any of the terms
of this Agreement.
10. General Release. In consideration for the severance payments and
benefits as set forth above, and other good and valuable consideration set forth
herein, the Executive hereby releases Foamex, its shareholders, directors,
officers, employees, agents, attorneys, affiliates, parents, subsidiaries,
predecessors, successors, assigns, and all persons acting by, through, under or
in concert with any of them, from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and expenses, and
from any claims of any nature whatsoever, known or unknown, which the Executive
now has, claims to have, own, hold or which the Executive at any time heretofore
had, held, or claims to have, including without limitation, Civil Action #
------ captioned ------- and claims for: wrongful discharge; breach of covenant
of good faith and fair dealing; intentional or negligent infliction of emotional
distress; breach of contract or implied contract; negligence; misrepresentation;
fraud; detrimental reliance; promissory estoppel; defamation; invasion of
privacy; sexual or other harassment; breach of laws governing safety in the
workplace; discrimination on the basis of sex, race, color, religion, age,
national origin, status as a handicapped of disabled person or status of a
non-citizen; any and all claims under the Age Discrimination in Employment Act
("ADEA"); any and all claims under Title VII of the Civil Rights Act of 1964;
any and all claims under the Americans with Disabilities Act; any and all claims
under state or local laws which prohibit improper discrimination; and any and
all claims for benefits under the Employee Retirement Income Security Act
(except for all claims for vested pension benefits under ERISA); and any and all
claims for attorneys' fees.
11. No Right to Re-employment. The Executive hereby agrees and recognizes
that his employment relationship with Foamex or its affiliates is being
permanently and irrevocably severed, that he will never re-apply for employment
with Foamex, and that Foamex
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has no obligation, contractual or otherwise, to rehire, re-employ, recall or to
hire him in the future, or return him to active status.
12. Cooperative Conduct/Non-Disparagement. The Executive hereby agrees, as
part of the consideration for this Agreement to cooperate with reasonable
requests by Foamex, in good faith and in a continuing manner. The Executive
agrees, among other things, to participate cooperatively with Foamex and
Foamex's counsel (and without additional consideration) in any litigation matter
in which the Executive may have knowledge or information or may be a witness. In
addition, the Executive agrees that he shall refrain from conduct and statements
which may be construed as disparaging or harmful to Foamex as an entity or to
any of its present, past, or future Directors, Officers or Employees
individually or collectively.
13. Additional Covenants and Acknowledgments. The Executive further
understands and agrees:
a) that the Executive has twenty-one (21) calendar days from the
date this Agreement is received by him to consider and accept the
Agreement by signing and returning it to Foamex, and if so
accepted, another seven (7) calendar days to revoke that
acceptance should he change his mind;
b) that the Executive has the right to consult any attorney prior to
signing this Agreement and has been encouraged to do so by
Foamex;
c) that the Executive has agreed that the terms of the Agreement are
and shall remain completely confidential, except that he may
disclose the terms of this Agreement to legal counsel and tax
advisors. It is understood and agreed by the Executive that those
to whom disclosure may be made under this provision also must
keep the terms of this Agreement confidential;
d) that the Executive acknowledges that this Agreement is
contractual and not a mere recital; and agrees that this
Agreement shall be given full force and effect and that it shall
be binding upon the Executive's heirs, executors, successors,
administrators and assigns.
14. Rights Transferable to Executive's Estate. If the Executive should die
during the term of this Agreement, the remaining unpaid portion of his severance
payment (if any) and his vested and unvested stock options (if any) will be
transferred and assignable to his estate, to the extent permissible by law and
the terms of the plan.
15. Parties Covered by Agreement. The provisions of this Agreement shall
inure to the benefit of Foamex, its successors and assigns, and shall be binding
upon Foamex and the
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Executive and his heirs, personal representatives, and successors, including,
without limitation, the Executive's estate and executors, administrators, or
trustees of such estate. In the event of the sale, merger, or consolidation of
Foamex with or into any other corporation or entity, or in the event
substantially all of the assets of Foamex shall be transferred to another
entity, the successor to such assets, as the case may be, shall, as a condition
to the consummation of the merger, consolidation, or sale, assume the
obligations of Foamex hereunder and the benefits to Foamex hereunder, and shall
be substituted for Foamex in all respects.
16. Severability. The invalidity or unenforceability of any provision or
part of any provision of this Agreement or any covenant contained herein shall
not affect the validity or enforceability of any other provision or part of any
provision of this Agreement, which shall remain in full force and effect. In the
event that any provision of this Agreement (or part thereof) is determined to be
invalid or unenforceable for any reason, that provision shall be construed by
limiting it so as to be valid and enforceable to the fullest extent compatible
with and possible under applicable law.
17. Application of Agreement. Except for agreements between the Executive
and Foamex concerning certain stock option grants listed in Schedule "A" to this
Agreement, upon execution of this Agreement, the Executive's employment with
Foamex and termination thereof shall be governed exclusively by this Severance
Agreement and Release, and this Agreement shall supersede any and all previously
existing agreements and understandings between the parties.
18. Period for Acceptance of Agreement. The terms of this Agreement shall
remain open for acceptance by the Executive at any time before and including
twenty-one (21) calendar days from the date this Agreement is received by the
Executive. Should the Executive decline to execute this Agreement, it is
understood that the terms contained and offered herein are withdrawn without
prejudice to the rights of Foamex.
19. Applicable Law. The Agreement shall be construed and enforced under and
in accordance with the laws of the Commonwealth of Pennsylvania.
(The Balance of this Page is Intentionally Left Blank)
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The Executive represents and certifies that he has carefully read and fully
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understands all of the provisions of this Agreement, that he has had full
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opportunity to seek the advice of counsel, and that he is signing this Agreement
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voluntarily, of his own free will and without duress; and that Foamex, its
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agents, representatives or attorneys have made no representations concerning the
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terms or effects of this Agreement other than contained herein.
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IN WITNESS THEREOF, the parties have duly executed this Severance Agreement
and Release on this day of _________, 2002.
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XXXXX XXXXXXX Date
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For Foamex International Inc. Date
Foamex L.P., Foamex Carpet Cushion LLC
and Subsidiaries
WITNESS: ______________________________________
Tendered this ____ day of ____________, 19__, to _____________
by __________________________________, Title ___________________________________
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