EXHIBIT 10.12
-------------
SEPARATION, CONSULTING AND NONCOMPETITION AGREEMENT
This Separation, Consulting and Noncompetition Agreement (hereafter
"Agreement") is entered into as of January 5, 2004 by and between John T. Forbis
(hereafter "Forbis") and Kroy Building Products, Inc. (hereafter "Company").
In exchange for the mutual promises set forth below and intending to be
legally bound hereby, Forbis and the Company hereby agree as follows:
1. Forbis' employment will be terminated on January 5, 2004 (the
"Termination Date"). Forbis will be paid his salary (less usual payroll
deductions) through the Termination Date.
2. Forbis agrees that for a period of time commencing on the Termination
Date and ending December 31, 2005, he shall provide consulting services relating
to the business of the Company pursuant to the following: a maximum of 40 hours
per week for a period of three months beginning January 6, 2004; a maximum of 32
hours per week for a period of three months beginning April 6, 2004; a maximum
of 16 hours per week for a period of three months beginning July 6, 2004; a
maximum of 8 hours per week for a period of three months beginning October 6,
2004; and a maximum of 8 hours per week through 2005, as requested by the
Company. Forbis and the Company agree that Forbis will not maintain an office at
any Company facility, but will be provided space as needed and that any
consulting services requested by the Company are performed by Forbis as an
independent contractor and not as an employee of the Company. In exchange for
the foregoing consulting services, the Company agrees to pay Forbis, as a
non-employee, twenty-four monthly payments in the amount of $21,500 each. The
payments will be mailed on the fifteenth day of each month beginning on the
later of January 15, 2004 or the day which is one day after the expiration of
the
Revocation Period (as defined in section 7(b) herein), and ending on December
15, 2005. If the fifteenth day of a particular month is a Saturday, Sunday or
Holiday, then the payment that month will be mailed on the first business day
after the fifteenth day of the month. Should Forbis breach his obligation to
provide consulting services hereunder, the Company, after providing Forbis with
at least 30 days notice and an opportunity to cure same, may terminate the
consulting arrangement and be relieved of any obligation to make Forbis any
further payments hereunder.
3. The Company shall cause the payments made pursuant to paragraph 2
hereunder to be reported to the Internal Revenue Service as income to Forbis on
a Form 1099. The Company shall have no responsibility to pay any federal, state
or local taxes due on the payments made to Forbis hereunder. Payment of any
federal, state or local taxes due on such payments is the exclusive
responsibility of Forbis, and Forbis agrees to indemnify and hold the Company
harmless from any such taxes, penalties or interest.
4. All fringe benefits of employment (including but not limited to
eligibility for bonus and car allowance) cease as of the Termination Date. To
the extent Forbis was a participant in any salary investment plan, profit
sharing plan, stock option plan or any other similar benefit plan (hereinafter
"Plans") during his employment with the Company, any rights, benefits or
obligations under such Plans remain governed by the terms of those Plans, and
this Agreement is not intended to either enhance or impair whatever rights,
benefits or obligations existed as of the Termination Date.
5. PROTECTION OF CONFIDENTIAL INFORMATION AND NON-COMPETITION.
Forbis acknowledges and agrees that the Noncompetition Agreement dated as
of September 9, 1999 between Forbis and the Company ("Noncompetition Agreement")
2
remains in full force and effect, is fully enforceable and survives the
termination of his employment, provided, however, the non-compete term (as set
forth in section 2(a) of the Noncompetition Agreement) shall be extended to a
period of three years commencing on the earlier of December 31, 2005 or the date
in which the consulting arrangement is terminated by the Company pursuant to
section 2 of this Agreement. Forbis agrees to comply with and be bound by the
terms of the Noncompetition Agreement, as amended herein.
6. GENERAL RELEASE.
Full and Final Release of All Claims
a. As a material inducement to the Company to enter into this
Agreement, Forbis does for himself and for his heirs, representatives,
executors, administrators, trustees, guardians, successors and assigns hereby
remise, release, settle, discontinue, satisfy and fully and finally forever
discharge any and all persons or entities, including without limitation the
Company and its past, present and future foreign and/or domestic agents,
servants, directors, officers, employees, shareholders, trustees, predecessors,
successors, assigns, parents, subsidiaries, divisions, affiliates (including but
not limited to Nortek, Inc., PlyGem Industries, Inc., and Variform, Inc.),
dealers, distributors, and insurers, and each of their past, present and future
foreign and/or domestic agents, servants, directors, officers, employees,
shareholders, trustees, predecessors, successors, assigns, parents,
subsidiaries, divisions, affiliates, dealers, distributors and insurers
(hereinafter collectively referred to as the "Released Parties"), of and from
any and all demands, liability, grievances, claims, actions, causes of action,
awards, verdicts, judgments, decrees, damages, compensatory damages, punitive
3
damages, delay damages, liquidated damages, attorney's fees, past, present and
future wages, fringe benefits and demands of every kind, whether in tort or in
contract, or for violation of federal or state law, or otherwise, whether at law
or in equity, and whether known or unknown, which Forbis has ever had, now has
or may hereafter have arising from any act or omission which occurred before the
date on which this Agreement is executed by Forbis.
The claims being released hereunder include, but are not limited to,
claims of negligence, breach of contract, wrongful discharge, violation of
federal, state and local laws which prohibit discrimination and/or retaliation
on the basis of race, color, national origin, religion, sex, age, and
disability, including, but not limited to, the Age Discrimination in Employment
Act of 1967, as amended, 29 U.S.C. Sections 621 et seq., and the Older
Workers Benefits Protection Act, as amended, 29 U.S.C. Sections 629 et
seq. (hereafter referred to as "OWBPA"), claims under Nebraska's Wage Payment
and Collection Law, claims growing out of any legal restrictions on the
Company's right to terminate its employees, claims arising directly or
indirectly from Forbis' employment with, or termination by, the Company
(including, but not limited to, any claims relating to wages, fringe benefits,
severance pay, overtime pay, etc.). Forbis further agrees that he will not file
a lawsuit, grievance, charge or claim against the Company, or against any of the
other Released Parties, based on any act or omission which occurred before the
date on which this Agreement is executed by Forbis.
b. As a material inducement to Forbis to enter into this Agreement, the
Company does for itself and its past, present and future foreign and/or domestic
agents, servants, directors, officers, employees, shareholders, trustees,
predecessors,
4
successors, assigns, parents, subsidiaries, divisions, affiliates (including but
not limited to Nortek, Inc., PlyGem Industries, Inc. and Variform, Inc.),
dealers, distributors, and insurers, and each of their past, present and future
foreign and/or domestic agents, servants, directors, officers, employees,
shareholders, trustees, predecessors, successors, assigns, parents,
subsidiaries, divisions, affiliates, dealers, distributors and insurers hereby
remise, release, settle, discontinue, satisfy and fully and finally forever
discharge Forbis and his heirs, representatives, executors, administrators,
trustees, guardians, successors and assigns of and from any and all demands,
liability, grievances, claims, actions, causes of action, awards, verdicts,
judgments, decrees, damages, compensatory damages, punitive damages, delay
damages, liquidated damages, attorney's fees, and demands of every kind, whether
at law or in equity, and whether known or unknown, which the Company has ever
had, now has or may hereafter have arising from any act or omission which
occurred before the date on which this Agreement is executed by the Company.
c. Notwithstanding the terms of this General Release, this Agreement shall
not impair the right of either Forbis or the Company to receive the performances
promised hereunder. Forbis and the Company reserve the right to commence a
lawsuit against the other to enforce the terms of this Agreement and/or to seek
monetary and/or equitable relief for its non-performance. Moreover, Forbis and
the Company further agree that, if a lawsuit is commenced by either (or both) of
them against the other to enforce the terms of this Agreement and/or to seek
monetary and/or equitable relief for its non-performance, then within sixty (60)
days of the date judgment is entered the party against whom judgment is entered
shall pay, over and above the amount of any judgment, the
5
prevailing party's reasonable attorney's fees and defense costs. In the event
that such lawsuit is settled or discontinued by consent of both parties prior to
judgment, or in the event that judgments are entered against both parties, then
neither party is the prevailing party hereunder, and Forbis and the Company
shall each bear their own attorney's fees and defense costs.
7. OWBPA REPRESENTATIONS OF FORBIS.
a. Forbis makes the following representations to the Company, each
of which is an important consideration to the Company's willingness to enter
into this Agreement with Forbis:
i. The payments and other benefits which the Company has
agreed to provide, as stated above, are payments and
benefits to which Forbis would not necessarily be
entitled were it not for this Agreement.
ii. Forbis is aware that federal, state, and local laws
prohibit discrimination against employees because of
their race, color, religion, sex, age, national origin,
disability, and otherwise and that an employee who
believes that he has been discriminated against for any
of these reasons has a right to file a lawsuit or to
initiate other legal proceedings against his employer
and to recover damages if it is proved that the employer
violated any one of these laws;
iii. Forbis is aware that, by signing this Agreement, which
includes a General Release, he is giving up any right to
6
recover damages or to obtain any other relief for
himself from the Company and the other entities and
persons described in paragraph 6 above (i.e. , the
Released Parties) not only on the basis of the
discrimination laws mentioned above, but also for any
and all other claims or causes of action which Forbis
has or believes that he has based upon any event which
occurred as a result of or in connection with his
employment with or termination of employment by the
Company;
iv. No promises or representations except those contained in
this Agreement have been made to Forbis in connection
with the termination of his employment;
v. Forbis has read and understands each and every provision
in this Agreement;
vi. Forbis has not filed any charge, claim or complaint with
a court or administrative agency against the Company, or
any of the other entities and persons described in
paragraph 7 above (i.e., the Released Parties) before
the date he signed this Agreement; and
vii. Forbis represents that he has not previously assigned or
transferred, or purported to assign or transfer, to any
person or entity, any claim released by him under this
Agreement or any portion thereof or interest therein.
7
b. Forbis also acknowledges and agrees that he has been advised by the
Company to review this Agreement with his attorney, that he has the opportunity
to have twenty-one (21) days from the date of his receipt of this Agreement to
consider executing it, and that he has the opportunity to revoke this Agreement
by giving written notice to the Company (c/o Lee D. Meyer, President and CEO
PlyGem Industries, Inc.) within seven (7) days (the "Revocation Period")
following the date of his execution of this Agreement. If this Agreement is
executed by Forbis before the expiration of 21 days from the date of his receipt
of the Agreement, Forbis acknowledges and agrees that this act was knowing and
voluntary and done with the understanding that he could have considered the
Agreement for the full 21 days before signing. Forbis understands and agrees
that the Agreement, including the rights to any payments hereunder, is not
effective or enforceable until the seven (7) day revocation period following the
date of execution has expired.
8. Forbis further agrees not to seek employment or reemployment with the
Company or any parent, subsidiary, related company, division or affiliate of the
Company (including without limitation Nortek, Inc., PlyGem Industries, Inc.,
Napco, Inc. and Variform, Inc.). Moreover, should Forbis ever attempt to seek
such employment or reemployment, Forbis agrees that Forbis' application or
request for employment may be rejected and that there shall be no obligation to
give Forbis' application or request for employment any consideration whatsoever
before rejecting the same.
9. Forbis also expressly agrees to release the Company and to indemnify
and hold harmless the Company from any and all damages, losses, demands, claims,
liability, actions, awards, verdicts, judgments, decrees, costs, penalties,
expenses, and counsel fees
8
by any person or entity claiming any subrogation interest, lien or other
interest in the payments made to Forbis hereunder.
10. Forbis and the Company expressly understand and agree that this
Agreement is a compromise of a doubtful and disputed claim and that the
aforesaid payments to Forbis are not in any way to be construed as an admission
by the Company of liability or fault of any kind to Forbis or to anyone else,
all such liability or fault being expressly denied by the Company.
11. CONFIDENTIALITY AGREEMENT.
Forbis agrees that, to the extent consistent with any legal, regulatory,
statutory, ethical, tax and/or fiduciary obligations and duties, and except as
may be necessary to implement and to give full force and effect to this
Agreement, Forbis shall keep both the fact of the payments by the Company and
the amount of those payments strictly confidential, and shall not disclose this
information to any other person or entity. Forbis further agrees that if and
when he ever intends to disclose the fact and/or the amount of the payments to
him by the Company, whether such intended disclosure be voluntary or in response
to legal compulsion or process (for example, a subpoena, a search warrant or a
court order), Forbis shall notify the Company orally and in writing at least
fourteen (14) days in advance of the date of the intended disclosure.
12. Forbis and the Company further agree that they will not in any manner,
directly or indirectly, disparage the other to any person or entity, including
but not limited to current and former employees of the Company, current and
former customers of the Company, and competitors of the Company.
9
13. Forbis and the Company agree that this Agreement shall be construed
according to the laws of the State of Nebraska.
14. This Agreement shall become effective upon the execution hereof by
both parties. Forbis and the Company expressly agree that this Agreement may be
executed in duplicate originals, and that a true and correct copy of this
Agreement shall be considered as effective for any purpose as if it were the
original.
15. Forbis and the Company understand and agree that this Agreement
contains all of the terms of the Agreement between them. Forbis and the Company
further represent that they have carefully read this entire Agreement, that the
terms thereof have been explained to them by their own attorneys, and that they
understand its content and effect. Forbis and the Company further acknowledge
that they understand that by signing this agreement, they have released specific
rights against each other.
16. Forbis shall be entitled to the incentives outlined in the letter from
Richard L. Bready, Chairman and CEO of Nortek, Inc., dated October 31, 2003
notwithstanding the requirement in section 3 of such letter that Forbis be
employed by WDS on the sale date. All other terms and conditions in such letter,
including but not limited to the other conditions in section 3 of such letter,
shall remain in full force and effect.
10
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
have hereunto set their hands and seals on the dates indicated below.
WITNESS:
- ---------------------------------- ----------------------------------
Print Name: JOHN T. FORBIS
-----------------------
Address: Date: 1/19/04
-------------------------- ---------------------
NORTEK, INC. KROY BUILDING PRODUCTS, INC.
- ---------------------------------- ----------------------------------
Richard L. Bready Lee Meyer
Chairman of the Board, CEO & President President & CEO, Ply Gem
Norteck, Inc. Industries, Inc.
Date: 1/19/04 Date: 1/19/2003
11