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EXHIBIT 10.2
SEVERANCE AGREEMENT
AGREEMENT, dated as of September 16, 1996 by and between Wolverine
Tube, Inc., a Delaware corporation ("Wolverine"), and Xxxxxx X. Xxxxxx an
individual residing at 00000 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000 (the
"Executive").
W I T N E S S E T H:
WHEREAS, Wolverine recognizes the Executive's expertise in connection
with his employment by Wolverine or its subsidiaries or affiliates
(collectively, the "Company"); and
WHEREAS, the Company desires to provide the Executive with severance
benefits or the opportunity for continued employment in a different position if
the Executive's employment in his current position is terminated for the
reasons set forth herein and the Executive refrains from engaging in certain
activities in the event his employment is terminated, upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. Termination of Employment.
(a) Termination for Cause; Resignation Without Good Reason.
(i) If the Executive's employment is terminated by the Company for
Cause, as defined in Section 1(a)(ii) hereof, or if the Executive resigns from
his employment hereunder, other than for Good Reason, as defined in Section
1(a)(iii) hereof, the Executive shall be entitled to only (A) severance
benefits as provided by the Company procedure and practice and (B) payment of
the pro rata portion of the Executive's salary through and including the date
of termination or resignation.
(ii) For purposes of this Agreement, termination for "Cause" shall
mean termination of the Executive's employment by the Company because of (A)
the Executive's conviction for, or guilty plea to, a felony or a crime
involving moral turpitude, (B) the Executive's commission of an act of
substantial personal dishonesty in connection with his employment by the
Company, (C) a substantial breach of fiduciary duty in connection with his
employment with the Company which shall include, but not be limited to, (1)
investment in any person or organization with the knowledge that such person or
organization has or proposes to have dealings with the Company, such person or
organization competes with the Company, or the Company is considering an
investment in such person or organization. (The reference to
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"organization" excludes federal credit unions, publicly owned insurance
companies and corporations the stock of which is listed on a national
securities exchange or quoted on NASDAQ if the direct and beneficial stock
ownership of the Executive, including members of his immediate family, is not
more than one percent (1%) of the total outstanding stock of such corporation);
(2) a loan (including a guaranty of a loan) from or to any person or
organization having or proposing any dealings with the Company or in
competition with the Company; (3) participation directly or indirectly in any
transaction involving the Company other than as an officer or employee of the
Company; (4) acceptance from any person or organization having or proposing any
dealings with the Company or in competition with the Company of any gratuity,
gift, entertainment or favor which exceeds either nominal value or common
courtesies which are generally accepted business practice; or (5) service as an
officer, director, partner or employee of, or consultant to, any person or
organization having or proposing dealings with the Company or in competition
with the Company; or (D) the Executive's willful and repeated failure, after
written notice, to execute the written policies of the Company as established
by the Board of Directors of the Company (the "Board").
(iii) For purposes of this Agreement, resignation for "Good Reason"
shall mean the resignation of the Executive after (A) notice in writing is
given to him of his relocation, without the Executive's consent, to a place of
business more than 35 miles from the location of the Executive's place of
business as of the date hereof, (B) a reduction in the Executive's benefits or
pay or (C) a substantial adverse alteration occurs in the nature or status of
the Executive's responsibilities from those in effect on the date hereof,
disregarding change in title only.
(iv) The date of termination for Cause shall be the date of receipt by
the Executive of written notice of such termination. The date of resignation
without Good Reason shall be the date of receipt by the Company of a written
notice of such resignation.
(b) Termination Without Cause; Resignation for Good Reason.
(i) If the Executive's employment is terminated by the Company Without
Cause, or if the Executive resigns from his employment for Good Reason, subject
to the Executive's continuing compliance with Section 2 of this Agreement, the
Executive shall be entitled to receive the following benefits:
(A) The Company shall pay to the Executive (x) in the event of such
termination or resignation within one (1) year following a Change in
Control, as defined in Section 1(b)(v) hereof, an amount equal to two (2)
year's salary; or (y) in all other such events, an amount equal to one (1)
year's salary; in either case to be paid at the rate in effect immediately
prior to the Severance Date (as defined
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in Section 1(b)(iii)) plus pay at the same rate for all vacation time
accrued during the calendar year in which the Severance Date occurs, with
such payment either, at Executive's option:
(X) as a lump sum within 30 days after the Severance Date, or
(Y) as a series of payments in accordance with the Company's
normal payroll procedures following the Severance Date.
(B) The Company shall reimburse the Executive for any costs incurred
by the Executive in electing COBRA continuation coverage under only the
Company's medical plan and maintaining life insurance coverage comparable
to that maintained for him by the Company for the period from the
Severance Date until the earlier to occur of:
(X) the date which is 12 months after the Severance Date (24
months if Section 1(b)(i)(A)(X) applies, or
(Y) the date on which the Executive is covered under the medical
plan of another employer.
(ii) The Executive shall have no further right under this Agreement or
otherwise to receive any bonus or other Compensation with respect to the year
in which such termination or resignation occurs and later years.
(iii) The date of termination of employment without Cause shall be the
date specified in a written notice of termination to the Executive and the date
of resignation for Good Reason shall be the date of receipt by the Company of
written notice of resignation (both such dates hereinafter referred to as the
"Severance Date").
(iv) Termination of the Executive's employment as a result of his
death or disability (if such Executive is eligible for benefits under the
Company's long-term disability plan) shall not constitute a termination by the
Company without cause for purposes of this Agreement.
(v) For purposes of this Agreement, "Change in Control" shall mean:
(A) The Company is merged, consolidated or reorganized into or with
another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of such corporation or
person immediately after such transaction are held in the aggregate by the
holders of Voting Stock (as that term is
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hereafter defined) of the Company immediately prior to such
transaction;
(B) The Company sells or otherwise transfers all or substantially all
of its assets to another corporation or other legal person, and as a
result of such sale or transfer less than a majority of the combined
voting power of the then-outstanding securities of such corporation or
person immediately after such sale or transfer is held in the aggregate by
the holders of Voting Stock of the Company immediately prior to such sale
or transfer;
(C) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that (x) any person (as the term "person" is used in Section
13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of securities representing 15% or more of the combined
voting power of the then-outstanding securities entitled to vote generally
in the election of directors of the Company ("Voting Stock"), or (y) any
person has, during any period, increased the number of shares of Voting
Stock beneficially owned by such person by an amount equal to or greater
than 15% of the outstanding shares of Voting Stock; provided, however,
that transfers of shares of Voting Stock between a person and the
affiliates or associates (as such terms are defined under Rule 12b-2 or
any successor rule or regulation promulgated under the Exchange Act) of
such person shall not be considered in determining any increase in the
number of shares of Voting Stock beneficially owned by such person;
(D) The Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Company has
occurred or will occur in the future pursuant to any then-existing
contract or transaction; or
(E) If, during any period of two consecutive years, individuals who
at the beginning of any such period constitute the Directors of the
Company cease for any reason to constitute at least a majority thereof;
provided, however, that for purposes of this clause (v) each Director who
is first elected, or first nominated for election by the Company's
stockholders, by a vote of at least two-thirds of the Directors of the
Company (or a committee thereof) then still in office who were Directors
of the Company at the beginning of any such period will be deemed to have
been a Director of the Company at the beginning of such period.
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Notwithstanding the foregoing provisions of Sections(C) or (D) unless
otherwise determined in a specific case by majority vote of the Board, a
"Change in Control" shall not be deemed to have occurred for purposes of
Sections(C) or (D) solely because (1)the Company, (2)an entity in which
the Company directly or indirectly beneficially owns 50% or more of the
voting securities (a "Subsidiary"), or (3)any employee stock ownership
plan or any other employee benefit plan of the Company or any Subsidiary
either files or becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule
14A (or any successor schedule, form or report or item therein) under the
Exchange Act disclosing beneficial ownership by it of shares of Voting
Stock, whether in excess of 15% or otherwise, or because the Company
reports that a change in control of the Company has occurred or will occur
in the future by reason of such beneficial ownership.
2. Secrecy. The Executive recognizes that the services performed by him are
special, unique and extraordinary in that, by reason of his employment, he may
acquire confidential information and trade secrets concerning the operation of
the Company, the use or disclosure of which could cause the Company substantial
loss and damages which could not be readily calculated and for which no remedy
at law would be adequate.
Accordingly, the Executive covenants and agrees with the Company that he
will not at any time, except in performance of the Executive's obligations to
the Company, or with the prior written consent of the Company pursuant to the
authority granted by a resolution of the Board, directly or indirectly,
disclose any secret or confidential information that he may learn or has
learned by reason of his association with the Company or use any such
information. The term "confidential information" includes, without limitation,
information not previously disclosed to the public or to the trade by the
Company's management with respect to the Company's products, facilities and
methods, trade secrets and other intellectual property, systems, procedures,
manuals, confidential reports, products price lists, customer lists, financial
information (including the revenues, costs or profits associated with any of
the Company's products), business plans, prospects, employee or employees,
compensation, or opportunities but shall exclude any information already in the
public domain which has been disclosed to the public during the normal course
of the Company's business.
The Company shall be entitled to obtain a temporary restraining order
and/or a preliminary or permanent injunction restraining the Executive from
engaging in activities prohibited by this Section 2 or such other relief as may
be required to specifically enforce any of the covenants in this Section 2.
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3. Amendment; Waiver. This Agreement may not be modified, amended or waived in
any manner except by an instrument in writing signed by both parties hereto;
provided, however, that any such modification, amendment or waiver on the part
of the Company shall have been previously approved by the Board. The waiver by
either party of compliance with any provision of this Agreement by the other
party shall not operate or be construed as a waiver of any other provision of
this Agreement, or of any subsequent breach by such party of a provision of
this Agreement.
4. Withholding. Payments to the Executive of all compensation contemplated
under this Agreement shall be subject to all applicable legal requirements with
respect to the withholding of taxes and similar deductions.
5. Governing Law. All matters affecting this Agreement, including the validity
thereof, are to be governed by, and interpreted and construed in accordance
with, the laws of the State of Alabama applicable to contracts executed in and
to be performed in that State. Nothing in this agreement shall affect the
rights of either party under state or federal laws affecting employment.
6. Notices. Any notice hereunder by either party to the other shall be given in
writing by personal delivery or certified mail, return receipt requested. If
addressed to the Executive, the notice shall be delivered or mailed to the
Executive at the address first set forth above, or if addressed to the Company,
the notice shall be delivered or mailed to Xxxxxxxxx Xxxxxxxxx Xxxx, Xxxxx 000,
0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxx 00000, or such address as the
Company or the Executive may designate by written notice at any time or from
time to time to the other party. A notice shall be deemed given, if by personal
delivery, on the date of such delivery or, if by certified mail, on the date
shown on the applicable return receipt.
7. Supersedes Previous Agreements. This Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements and writings with respect
to the subject matter hereof, all such other negotiations, commitments,
agreements and writings will have no further force or effect, and the parties
to any such other negotiation, commitment, agreement or writing will have no
further rights or obligations thereunder.
8. 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.
9. Headings. The headings of sections herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
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IN WITNESS WHEREOF, the Company has caused the Agreement to be signed by
its officer pursuant to the authority of its Board, and the Executive has
executed this Agreement, as of the day and year first written above.
WOLVERINE TUBE, INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Chairman
EXECUTIVE
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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