1
EXHIBIT 10.10
SETTLEMENT AGREEMENT
This SETTLEMENT AGREEMENT (the "Agreement") is made as of April 27,
2000 by and between XXXXXXX & XXXXXX PRODUCTS CO., a Delaware corporation (the
"Company"), and XXXXXX X. XXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, Executive has been employed by the Company as President -
Xxxxxxx & Xxxxxx North American Interior Systems Group pursuant to the terms of
that certain Employment Agreement between Executive and the Company dated
January 20, 1999 (the "Employment Agreement"); and
WHEREAS, the Company and Executive agree that Executive's employment
with the Company was terminated effective as of April 30, 2000; and
WHEREAS, the Company and Executive desire to confirm in this Agreement
the payments and other benefits to be provided to Executive resulting from such
termination;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Separation Date. Executive's termination of employment with the
Company shall be effective as of April 30, 2000 (the "Separation Date").
2. Pre-Separation Date Expenses. The Company and Executive agree that
the Company has fully reimbursed Executive for all travel, entertainment and any
other miscellaneous business or other reimbursable expenses incurred by
Executive prior to the Separation Date.
3. Accrued Vacation. The Company shall pay to Executive Thirteen
Thousand Eight Hundred and Eighty Nine ($13,889), less applicable payroll
deductions and withholdings, said amount being equal to Executive's accrued but
unused vacation as of the Separation Date, to be paid in a lump sum on June 1,
2000.
4. Salary Adjustment. As soon as practicable after the execution and
delivery of this Agreement and the expiration of the revocation period described
in Paragraph 11(e) below, the Company shall pay to Executive Ten Thousand Six
Hundred Forty Dollars ($10,640), less applicable payroll deductions and
withholdings, said amount being equal to an adjustment in Executive's base
salary for the period commencing January 20, 1999 and ending March 1, 1999 to be
paid in a lump sum on June 1, 2000.
5. Bonus Plan. Executive will receive a pro rata bonus under the
Company's annual Executive Incentive Compensation Plan (the "EIC Plan") for
2000. The Company guarantees
2
that the pro rata bonus shall be no less than a pro rata payment of the target
bonus or $66,666.67. The pro rata bonus, less applicable payroll deductions and
withholdings, will be paid to Executive on or before March 31, 2001.
6. Salary Continuation. During the twelve (12) month period from the
Separation Date through April 30, 2001. Executive shall continue to receive
Executive's base salary in the annual amount of Four Hundred Thousand Dollars
($400,000), less applicable payroll deductions and withholdings, payable in
accordance with the Company's normal payroll practices and procedures in effect
from time to time. If Executive has met all terms and conditions of the
agreement as of April 30, 2001 he shall receive remainder in a lump-sum payment.
7. Continuation of Certain Benefits. The Company shall provide
Executive and his qualified beneficiaries the opportunity to continue health
coverage under the Company's health plans under Section 4980B of the Internal
Revenue Code of 1986 and Part 6 of subtitle B of Title I of the Employee
Retirement Income Security Act of 1974, as amended May 1, 2000, shall be kthe
beginning date for measuring the maximum continuation period under COBRA. During
the twelve month (12) month period from the Separation Date through April 30,
2001, if Executive elects to continue to receive Executive's current health
benefits (other than the annual executive medical examination and participation
in the Company's executive medical and long-term disability plans), the Company
agrees to pay the applicable active Company contributions from time to time for
the relevant coverages in effect from time to time; provided, however, that such
Company payments shall cease prior to the expiration of such twelve (12) month
period to the extent that Executive actually receives health benefits from a
subsequent employer of Executive during such period, and Executive shall report
any such benefits actually received to the Company. Notwithstanding anything
herein to the contrary, the Company reserves the right to change the design and
terms of the applicable plans from time to time and Executive shall be treated
consistent with changes implemented for other active employees. All benefits and
perquisites provided to Executive by the Company during the period of his
employment not expressly referenced in this Paragraph shall terminate effective
as of the Separation Date.
8. Purchase of Automobile. Executive shall purchase the automobile
furnished to him by the Company at a price equal to the automobile's current
fair market value of Thirty-Two Thousand Dollars ($32,000). The purchase price
of the automobile shall be deducted from Executive's pro rata bonus under the
EIC Plan described in Paragraph 5 above.
9. Stock Options. As of the Separation Date, all stock options granted
to Executive under the Xxxxxxx & Xxxxxx Corporation 1994 Employee Stock Option
Plan shall immediately vest. Executive shall be permitted to exercise the
options at any time prior to the earlier of (i) the original expiration date of
such options or (ii) October 31, 2000. Any outstanding unexercised options as of
October 31, 2000 shall lapse as of such date.
10. Relocation Expenses. In the event Executive and his family shall
relocate to North Carolina during the period from the Separation Date through
April 30, 2002, the Company shall cause Executive to have access to the special
moving rates, at Executive's own expense, otherwise available only to the
Company through its corporate relocation policy provided the relocation expenses
are not otherwise reimbursable from another entity.
2
3
11. Release of the Company. Executive, on behalf of himself and his
heirs, personal representatives, successors and assigns, hereby releases and
forever discharges the Company, its affiliates, and each and every one of their
respective present and former directors, officers, employees, agents, successors
and assigns from and against any and all claims, demands, damages, actions,
causes of action, costs and expenses, which Executive now has, may ever have had
or may have hereafter upon or by reason of any matter, cause or thing occurring,
done or omitted to be done prior to the date of this Agreement, including
without limitation all claims he may have under any state or federal statute or
law governing or applying to Executive's employment with the Company, its
subsidiaries or affilitates. and all rights and claims the Executive has or
might have under (i) the Employment Agreement, (ii) that certain Change in
Control Agreement between Executive and Xxxxxxx & Xxxxxx Corporation, (iii) the
Age Discrimination in Employment Act of 1967, as amended ("ADEA") and the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA");
provided, however, that this release shall not apply to any claims which
Executive may have for the payment or provision of the benefits under this
Agreement or under any agreements, plans, contracts, documents or programs
described or referenced in this Agreement. For purposes of this Agreement,
"Employment-Related Claims" means all rights and claims Executive has or may
have related to his employment by or status as an employee, officer or director
of the Company or any of its affiliates or to any employment practices and
policies of the Company or its affiliates.
Executive acknowledges and agrees that he has read this release in its
entirety and that this release is a general release of all known and unknown
claims, including rights and claims arising under ADEA. Executive further
acknowledges and agrees that:
(a) This release does not release, waive or discharge any rights
or claims that may arise for actions or omissions after the
date of this Agreement;
(b) Executive is entering into this Agreement and releasing,
waiving and discharging rights or claims only in exchange for
consideration which he is not already entitled to receive;
(c) Executive has been advised, and is being advised by this
release, to consult with an attorney before executing this
Agreement;
(d) Executive has been advised, and is being advised by this
release, that he has up to twenty-one (21) days within which
to consider this release; and
(e) Executive is aware that this release will not become effective
or enforceable until seven (7) days following his execution of
this Agreement and that he may revoke this release at any time
during such period by delivering (or causing to be delivered)
to the Company at the address provided in Paragraph 15 hereof
written notice of his revocation of this release no later than
5:00 p.m. eastern time on the seventh (7th) full date
following his execution of this Agreement.
3
4
12. Covenants of Executive.
(a) Return of Property. Executive shall return to the Company all
property of the Company in or under Executive's possession or control, including
without limitation all tangible confidential information described in Paragraph
12(d) below.
(b) Non-Competition. Executive shall not compete in North America with
the Company or its subsidiaries or affiliates in any way whatsoever that is
related to the automotive carpeting, mats, headliners, plastics and/or
automotive acoustic business, industry and/or services during the period from
the Separation Date through April 30, 2001. Without limiting the generality of
the foregoing, Executive shall not, during such period of time, directly or
indirectly (whether for compensation or otherwise), alone or as an agent,
principal, member, partner, officer, employee, trustee, director, shareholder or
in any other capacity, own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or furnish any capital to, or be
connected in any manner with or provide any services as a consultant for any
business which currently competes or competes in the future with the business of
the Company, its parent company or their subsidiaries or affiliates as it may be
conducted from time to time in the automotive carpeting, mats, headliners,
plastics, and/or automotive acoustic business, industry and/or services related
fields; provided, however, that notwithstanding the foregoing, nothing contained
in this Agreement shall be deemed to preclude Executive from owning not more
than 5% of the publicly traded securities of any entity which competes with the
Company, its parent company or their subsidiaries or affiliates in the
automotive carpeting and/or automotive acoustic business, industry and/or
services related fields.
(c) Non-Solicitation. Executive shall not during the period from the
Separation Date through April 30, 2001, directly or indirectly (i) solicit, for
employment or facilitate the solicitation of or otherwise engage as an employee,
independent contractor or otherwise, any person who is or was an employee of the
Company or any of its subsidiaries or affiliates at any time on or after April
12, 2000 or (ii) induce or attempt to induce any employee of the Company or any
of its subsidiaries or affiliates to terminate such employment.
(d) Confidential Information. Executive shall keep confidential all
confidential information of the Company and any of its subsidiaries or
affiliates and will not use or disclose such information to any person without
the prior written approval of the Board of Directors of the Company or use such
information for any purpose whatsoever. It is understood that for purposes of
this Agreement the term "confidential information" shall be construed broadly to
include all information or compilations of information which (i) is, or designed
to be, used in the business of the Company (or any of its subsidiaries or
affiliates) or results from its (or their) research or development activities,
(ii) is private or confidential in that it is not generally known or available
to the public and (iii) gives the Company (or any of its affiliates) an
opportunity to obtain an advantage over competitors who do not know or use it.
(e) Cooperation. Executive shall promptly notify the Company of any
threatened, pending or completed investigation, claim, action, arbitration, suit
or proceeding, whether civil, criminal, administrative or investigative
("Proceeding"), in which he may be involved, whether as an actual or potential
party or witness or otherwise, or with respect to which he may receive
4
5
requests for information, by reason of his association with the Company or any
of its subsidiaries or affiliates. Executive shall cooperate fully with the
Company and its subsidiaries and affiliates in connection with any Proceeding at
no expense to the Company or any of its subsidiaries or affiliates other than
the reimbursement of Executive's reasonable out-of-pocket expenses. Executive
shall not disclose any confidential or privileged information in connection with
any Proceeding without the prior written consent of the Company and shall give
prompt notice to the Company of any request therefor.
(f) Acknowledgement Regarding Covenants. Executive acknowledges and
agrees that the promises and restrictive covenants set forth in this Paragraph
12 are reasonable and necessary to protect the legitimate interest of the
Company and are reasonably limited in time, scope and territory. Executive
acknowledges that, given his former position and the information he possesses
regarding the Company and their operations, the business of the Company, its
subsidiaries and/or its affiliates, would be substantially and materially
damaged in the event of any violation of the promises and covenants herein
contained, and the Company shall be entitled (in addition to any other remedy
that may be available to it) to (i) a decree or order for specific performance
of any such promise or covenant and (ii) an injunction restraining the violation
or threatened violation of any such promise or covenant. In the event a court
determines that any provision(s) regarding these restrictive covenants is (are)
unenforceable, the parties mutually agree that the court shall modify the
provision(s) to make them enforceable and shall full enforce any modified
provisional(s).
13. Confidentiality. Executive hereby covenants and agrees to keep in
full confidence all information concerning this Agreement except (i) to the
extent disclosure is or may be required by applicable law or (ii) to the extent
disclosure to Executive's legal counsel and personal financial advisors is
reasonably necessary in connection with Executive's consideration of the terms
of this Agreement or Executive's personal financial dealings. Executive
acknowledges and agrees that the Company shall be entitled to enforce
specifically the covenant in this paragraph by seeking an injunction against
Executive in addition to any other remedies available to the Company at law or
in equity.
14. Non-Disparagement. Executive and the Company agree not to disparage
the other party, and the other party's officers, directors, employees,
shareholders, and agents, in any manner likely to be harmful to them or their
business, business reputation or personal reputation; provided that both
Executive and the Company shall respond accurately and fully to any question,
inquiry or request for information when required by legal process.
5
6
15. Notice. Any notice required to be given by one party to the other
party hereunder shall be deemed effective if mailed by certified of registered
mail:
To the Company: Xxxxxxx & Xxxxxx Products Co.
0000 Xxx Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Attention: Chairman and Chief Executive Officer
To Executive: Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, 00000
16. Governing Law. This Agreement and all rights and obligations of the
parties shall be construed and interpreted under and pursuant to the laws of the
State of Michigan.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements with respect to the
subject matter hereof, including without limitation the Employment Agreement.
Any amendment to this Agreement must be in writing and signed by both parties.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date and year first above written.
XXXXXXX & XXXXXX PRODUCTS CO.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
Chairman of the Board & CEO
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
6
