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EXHIBIT 10.23
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement ("Agreement") is entered into by and
between Michael O. Fifer ("Employee"), of 14 Woodcrest Road, Manchester,
Massachusetts 01944 and Watts Industries, Inc., including its subsidiaries and
affiliates (hereinafter referred to individually and collectively as "the
Company"), with a principal office at 815 Chestnut Street, North Andover,
Massachusetts 01845. The purpose of this Agreement is to establish an amicable
arrangement for ending Employee's employment relationship with the Company as of
May 31, 2003.
Employee acknowledges that he is entering into this Agreement voluntarily
and that the Company has advised him in writing to seek the advice of an
attorney prior to executing this Agreement. Employee further acknowledges that
he has carefully read and fully understands all aspects of this Agreement,
including that he is voluntarily giving up his right to bring any and all
possible legal claims against the Company, including but not limited to claims
relating to his employment or the termination thereof. By entering into this
Agreement, Employee acknowledges that the Company is not admitting in any way
that it violated any legal obligation that it owed to him or to any person.
In exchange for the Company's payment of severance and other valuable
consideration as set forth in this Agreement, and Employee's execution of this
Agreement and agreement to terminate his employment with the Company effective
May 31, 2003 (hereinafter referred to as the "Termination Date") and the
Employee's agreement to release and waive any and all claims against the
Company, as set forth in Paragraphs 13 and 14 below, the Company and Employee
mutually agree as follows:
(1) The Company will consider Employee as an inactive employee of the
Company for the period from November 25, 2002 to May 31, 2003
("Inactive Employee Period"). During the Inactive Employee Period,
Employee will be paid his regular base salary, less the usual
deductions for taxes and benefits. Such salary payments shall take
place on the following dates in accordance with the Company's
usual payroll cycle: December 16, 2002; and on or about the 16th
day of January through May, 2003. As an inactive employee,
Employee will not perform any duties for or on behalf of the
Company unless expressly authorized by the Company in writing.
During this period, Employee agrees that he will provide services
to the Company on an as-needed basis.
(2) Commencing effective June 1, 2003, the Company agrees to pay
severance payments to Employee consisting of continuation of
Employee's base salary rate in effect on the Termination Date,
less appropriate federal, state, FICA and other payroll
deductions, for seven (7) months through December 31, 2003 ("the
Severance Pay Period"). The severance payments will be made on a
monthly basis on or about the 16th day of each month in the
Severance Pay Period in accordance with the Company's normal
payroll cycle.
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(3) Employee has already been paid his salary wages, less the usual
deductions, up to and including November 29, 2002. Employee will
not report to work after November 25, 2002. Employee will be
considered to have resigned from active employment and as an
officer of the Company and any of its subsidiaries and affiliates
effective as of November 25, 2002.
(4) Medical and dental plan participation will continue under the
Company's plans until May 31, 2003 at which point Employee's
eligibility to participate in such plans cease unless Employee
exercises extension rights under the COBRA law as will be
explained under separate cover. Upon Employee's election of COBRA
coverage, the Company agrees to pay Employee's medical and dental,
if any, COBRA premium for the Severance Pay Period, subject to his
continued eligibility for COBRA coverage.
(5) Employee's participation in the Company's other benefit plans
shall cease in accordance with their terms on May 31, 2003. This
includes, without limitation, the termination of Employee's
participation in the following Company Plans in accordance with
the terms of the respective plan provisions: Stock Option Plans;
Management Stock Purchase Plan; Short-Term Disability Plan;
Long-Term Disability Plan; Pension Plan; Supplemental Pension
Plan; 401(k) Plan; and Life Insurance Plan.
(6) Employee will separately receive a payment equal to fourteen (14)
days accrued vacation, less appropriate tax withholdings. As an
inactive employee, no vacation will accrue to Employee for fiscal
year 2004.
(7) In accordance with the provisions of the Executive Bonus Plan in
which Employee participates, the Company will pay Employee his
bonus earned for fiscal year 2002, less the usual tax deductions,
in accordance with the established performance goals and
guidelines, if and when such bonuses are awarded in the normal
course of the Company's business. Mr. Fifer will not be eligible
to participate in the Executive Bonus Plan for fiscal year 2003.
(8) The Company will provide the Employee with a senior executive
outplacement program through Lee Hecht Harrison for a period of
one (1) year.
(9) Mr. Fifer's outstanding loan under the Executive Stock Purchase
Loan Plan ("Loan Plan") will be handled in accordance with the
terms of the Loan Plan and the Promissory Note executed by
Employee.
(10) Except for the Company cell phone, computer equipment, and
automobile (all of which Employee agrees to return to the Company
on or before December 31, 2002), Employee hereby represents that
he has delivered, or will deliver, to the Company any Company
property previously provided to him by the Company together with
any and all documents, tapes, computer discs, software,
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information, records, drawings, data or any other Company
information and materials in any format which were in his
possession or under his control.
(11) Employee also acknowledges and agrees that during the course of
his employment with the Company he obtained or was otherwise
provided with confidential and proprietary information from the
Company in confidence for use in connection with his work for the
Company. Employee agrees not to use such information or to
disclose such information to others. "Confidential Information"
shall include, but not be limited to, customer lists, brochures,
drawings, techniques, processes, "know-how", reports, and other
such information of any nature made available to Employee by
virtue of Employee's association with the Company. This
Confidential Information shall be held in strict confidence for as
long as this Confidential Information is not known or available to
the general public.
(12) The parties agree that Employee's employment with the Company will
be terminated effective May 31, 2003. Employee understands that in
exchange for his release of claims, and other consideration set
forth in this Agreement, against the Company and others, he is
eligible to receive the severance pay and other valuable
consideration as set forth in this Agreement. Employee
acknowledges that he is entitled to no other compensation or
benefits, other than as expressly set forth in this Agreement, and
he hereby waives all claims thereto.
(13) Except for certain vested pension benefits, if any, Employee, of
his own free will, hereby voluntarily releases and forever
discharges the Company, its subsidiaries and affiliates, and its
and their predecessors, successors and assigns and its and their
current and former directors, officers, shareholders, employees
and agents, both individually and in their official capacities
with those entities, of and from any and all actions or causes of
action, suits, claims, demands, liabilities, charges, complaints,
contracts, agreements and promises, whatsoever, in law or equity,
which against any of them, Employee, his heirs, executors,
administrators, successors, and assigns may now have or hereafter
can, shall or may have for, upon or by reason of any matter, cause
or action whatsoever, whether or not known to him, that has
occurred up to the date of his execution of this Agreement,
including without limitation those claims arising out of (a) his
employment by the Company (except only such matter as to which
Employee is entitled to coverage as an insured, pursuant to the
terms of any insurance policy owned by the Company at the time
that matter shall be deemed to have occurred), (b) the
compensation, benefits, terms and conditions of his employment and
(c) the decision that his employment shall cease, including but
not limited to, any alleged violation of TITLE VII OF THE CIVIL
RIGHTS ACT OF 1964, AS AMENDED, THE CIVIL RIGHTS ACT OF 1991,
SECTIONS 1981 THROUGH 1988 OF TITLE 42 OF THE UNITED STATES CODE,
AS AMENDED, THE NATIONAL LABOR RELATIONS ACT, THE AMERICANS WITH
DISABILITIES ACT OF 1990, THE FAMILY MEDICAL LEAVE ACT (29 U.S.C.
SEC. 2601, ET SEQ.), THE OCCUPATIONAL SAFETY
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AND HEALTH ACT, THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF
1967, AS AMENDED, THE OLDER WORKERS BENEFIT PROTECTION ACT, 29
U.S.C. SECTION 626(f) (1997) and any other federal, state or local
laws, regulations or ordinances, and/or public policy, contract or
tort law, having any bearing whatsoever on the terms and
conditions and/or cessation of his employment with the Company, or
any of its subsidiaries and affiliates and any predecessors or
successors thereof, he ever had or has as of the date of his
execution of this Agreement.
(14) Employee waives the right to file any charge or complaint on his
own behalf and/or to participate in any charge or complaint which
may be made by any other person or organization on his behalf
before any federal, state, or local court or administrative agency
against the Company, or any of its subsidiaries and affiliates and
its predecessors, successors, assigns, current and former
directors, officers, shareholders, employees or agents, except as
such waiver is prohibited by law. Should any such charge or
complaint be filed, Employee agrees that he will not accept any
relief or recovery therefrom. Employee confirms that no charge,
complaint, or action exists in any forum or form.
(15) Employee acknowledges that he has been given the opportunity to
consider this Agreement for twenty-one (21) days before signing
it. In the event that Employee signs this Agreement within less
than twenty-one (21) days of his receiving it, he acknowledges
that he did so voluntarily and with knowledge of the opportunity
to consider this Agreement for the entire twenty-one (21) day
period. Employee also acknowledges that for a period of seven (7)
days following the date he signs this Agreement he may revoke its
terms by written notice sent to RONALD W. GORSKI, CORPORATE
ATTORNEY AT 815 CHESTNUT STREET, NORTH ANDOVER, MA 01845 and
postmarked within seven (7) days of execution. This Agreement
shall not become effective or enforceable until the seven (7) day
period following his execution hereof has expired, unless the
seventh (7th) day is a Saturday, Sunday or legal holiday in
Massachusetts, in which event the revocation period shall not
expire until the next following day which is not a Saturday,
Sunday or legal holiday. No payments will be made under this
Agreement until the seven-day period has expired following
Employee's execution of this Agreement.
(16) Employee agrees to not make any disparaging statements concerning
the Company or any of its subsidiaries or affiliates or current or
former officers, directors, employees or agents. Employee further
agrees not to take any actions or conduct himself in any way that
could reasonably be expected to adversely affect the reputation or
goodwill of the Company or any of its current or former officers,
directors, employees or agents. Employer agrees to direct all
employees whom it informs the terms of this Agreement (other than
as a result of a financial disclosure) not to make any disparaging
statements concerning the Employee.
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(17) Employee agrees that he will not solicit any of Employer's
employees for a competing business or otherwise induce or attempt
to induce such employees to terminate their employment with
Employer for the period of time through December 31, 2003.
(18) This Agreement shall be construed to be a contract to be governed
by the laws of the Commonwealth of Massachusetts, excluding its
conflicts of laws principles. The parties agree that this
Agreement represents the entire agreement of the parties and
supersedes (except as set forth in Paragraph 6) all prior
communications, agreements or understandings, either oral or
written, if any, regarding the terms of his termination.
(19) The parties have read and fully considered each and every
paragraph of the foregoing Agreement and are mutually desirous of
entering into such Agreement, provided Employee shall have
executed, notarized and returned three (3) originals of this
Agreement to the attention of Ronald W. Gorski, Corporate Attorney
at the address set forth in paragraph 15 NO LATER THAN MONDAY,
DECEMBER 30, 2002. No severance payments shall be made or other
valuable consideration extended under this Agreement unless and
until the Employee executes the Agreement and returns it to the
Company as provided in the immediately preceding sentence.
(20) Employee agrees to keep the existence and terms of this Agreement
and the negotiations leading to this Agreement in the strictest
confidence at all times and not reveal the existence or terms of
this Agreement or such negotiations to any persons except his
immediate family members, his attorney, and his financial
advisors, and to them only provided that they also agree to keep
such information completely confidential. Notwithstanding the
foregoing, Employee may make disclosure to the extent required by
law or to the extent reasonably necessary to enforce his rights
under this Agreement, PROVIDED, HOWEVER, that he gives as much
advance notice as reasonably possible to the Company concerning
any such anticipated disclosure. Employee further represents that
at all times before signing this Agreement, he has kept the
negotiations leading to this Agreement completely confidential
except for permitted disclosures as set forth in the first
sentence of this Paragraph.
(21) If any term, covenant, condition or provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining terms, covenants and conditions shall
remain in full force and effect.
EMPLOYEE HAS BEEN ADVISED THAT HE HAS AT LEAST TWENTY-ONE (21) DAYS TO CONSIDER
THIS AGREEMENT AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR
TO EXECUTION OF THIS AGREEMENT. EMPLOYEE FURTHER UNDERSTANDS THAT HE MAY REVOKE
THIS AGREEMENT
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FOR A PERIOD OF SEVEN (7) DAYS FOLLOWING THE DAY HE EXECUTES THE AGREEMENT AND
SAID AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION
PERIOD HAS EXPIRED. EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT WILL BE A BINDING
LEGAL DOCUMENT AND THAT HIS SIGNATURE WILL COMMIT HIM TO ITS TERMS. HAVING
ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES SET FORTH HEREIN, AND
TO RECEIVE THEREBY THE SUMS AS SET FORTH IN PARAGRAPH 1 AND 2 ABOVE AND OTHER
SUMS AND BENEFITS TO WHICH HE WOULD NOT OTHERWISE BE ENTITLED, EMPLOYEE FREELY
AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING
TO WAIVE, SETTLE AND RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST THE COMPANY
AND RELATED PERSONS AND ENTITIES.
NOW THEREFORE, the parties to this Agreement hereby set their hands and
seals on this 30 day of DECEMBER, 2002.
/s/ Michael O. Fifer
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Michael O. Fifer
Sworn to before me this 30th day of DECEMBER, 2002
/s/ Kathy Bradley
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Notary Public
My Commission Expires: 9-7-02
WATTS INDUSTRIES, INC.
By: /s/ William C. McCartney
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