MUTUAL SEPARATION AND RELEASE
AGREEMENT
THIS MUTUAL SEPARATION AND RELEASE AGREEMENT
(the “Agreement”) is made and entered into as of this
12 th
day of June, 2008, by and among
CHROMCRAFT REVINGTON, INC. (the “Company”), a Delaware
corporation, and BENJAMIN M. ANDERSON-RAY (the
“Executive”), a resident of the State of
Indiana,
WHEREAS, the Executive has been serving as a
director and has been employed as the Chairman of the Board and
Chief Executive Officer of the Company; and
WHEREAS, the Company recognizes the
Executive’s contributions in developing the Company’s
new business model and his other valuable service and contributions
to the Company; and
WHEREAS, the Company and the Executive desire to
enter into this Agreement to memorialize their mutual understanding
and agreement with respect to the Executive’s separation from
employment with the Company and its subsidiaries, the
Executive’s resignation from the boards of directors of the
Company and its subsidiaries, the Executive’s advisory role
following his separation from employment and the payment of
severance to the Executive as provided herein.
NOW, THEREFORE, in consideration of the
foregoing recitals, the mutual agreements and obligations contained
herein, the severance payment contemplated hereby and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Executive hereby agree
as follows:
Section 1 . Separation from Employment .
(a) The Company and the Executive hereby
agree that the Executive’s employment by the Company shall
end effective as of 5:00 p.m. EDT on June 30, 2008 (the
“Effective Time”). In this regard, the Company and the
Executive hereby agree to the mutual termination of the
Executive’s employment with the Company as its Chairman of
the Board and Chief Executive Officer as of the Effective Time.
This Agreement shall not constitute a termination of the
Executive’s employment under the Employment Agreement (as
hereinafter defined) by the Company (whether with or without cause)
or by the Executive (whether with or without good
reason).
(b) The Executive hereby resigns, effective
as of the Effective Time, as (i) an officer and employee of,
and from all other positions with, each of the Company’s
subsidiaries, and (ii) a member of the Company’s Benefit
Plans Administrative Committee.
Section 2 . Resignation as a Director . The
Executive hereby resigns, effective as of the Effective Time, as a
director of the Company and each of the Company’s
subsidiaries. The Executive hereby waives notice of the meeting of
the board of directors of the Company to be held on June 13,
2008.
Section 3 . Status of Employment Agreement . The
Company and the Executive acknowledge that they are parties to an
Employment Agreement dated June 22, 2005 (the
“Employment Agreement”). The Company and the Executive
hereby agree that Sections 1, 2, 3, 4 and 5 of the Employment
Agreement in their entirety are hereby terminated and are of no
further force or effect as of the Effective Time (other than the
definitions of terms specified in such sections, which shall
continue to be applicable to the Sections of the Employment
Agreement that survive the Effective Time). Notwithstanding any
provision of the Employment Agreement to the contrary, the Company
and the Executive further agree that Sections 6, 7, 8, 9, 10,
11, 12 and 13 of the Employment Agreement shall remain in full
force and effect following the Effective Time in accordance with
the provisions thereof. All other employment or similar agreements
or arrangements, if any, between the Company or any of its
subsidiaries and the Executive are hereby terminated.
Section 4 . Salary; Vacation; Expenses; Other . The
Executive agrees that the Company and/or the appropriate subsidiary
or affiliate of the Company have paid in full to the Executive all
salary, vacation, compensation and other amounts to which he is
entitled in connection with all of his services as a director and
employee of the Company and/or any of its subsidiaries or
affiliates through and including the Company’s last payroll
date preceding the date of this Agreement and that he shall not be
entitled to any additional salary or compensation from the Company
and/or any of its subsidiaries or affiliates following the date of
this Agreement, (a) other than his normal salary from such last
payroll date through and including the Effective Time, which shall
be paid in accordance with the Company’s usual payroll
practices, and (b) payment for ten (10) days of accrued
but unused vacation for which the Executive shall be paid at the
Effective Time. In addition, the Executive represents that, to his
best knowledge, he has submitted all or substantially all expense
reports and other requests for expense reimbursement to the Company
prior to the date of this Agreement, and the Executive agrees that
the Company and/or the appropriate subsidiary or affiliate have
reimbursed him for all of such expense reports and requests for
reimbursement through and including the date of this Agreement,
except for the expense report submitted by the Executive on the
date hereof. In the event that a request for expense reimbursement
has not been made by the Executive on or prior to the date of this
Agreement, the Executive shall submit such request to the Company
on or before July 31, 2008 in a manner consistent with the
Company’s policies and procedures, and the Executive
represents and agrees that each such request shall represent
previously unreimbursed expenses incurred by him in the ordinary
and usual course of the Company’s business. The Company shall
promptly reimburse the Executive for such expenses in accordance
with its policies and procedures on business expense
reimbursement.
Section 5 . Status of Employee Benefit Plans
.
(a) Employee Benefit Plans . The
Executive’s and his spouse’s participation and
eligibility to participate in, and all benefits or payments under,
any and all employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended)
and any and all other plans, programs, arrangements or policies
sponsored, maintained or offered by the Company or any of its
subsidiaries (including, but not limited to, any health, medical,
life, accidental death, disability, retirement, profit sharing,
incentive compensation (including, but not limited to, the
Company’s 2007 Executive Incentive Plan (“2007
Incentive Plan”), deferred compensation and any other plan,
program, arrangement or policy sponsored, maintained or offered by
the Company) shall terminate and cease as of the Effective Time;
provided, however, that (i) all benefits of the Executive that
are fully vested under the Company’s Employee Stock Ownership
Plan (“ESOP”) and the Company’s Savings Plan
(“401(k) Plan”) shall be paid to the Executive in
accordance with the terms of such plans, and (ii) in the event
the Executive elects coverage for himself and/or his spouse under
the Company’s group health insurance plan in accordance with
the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), the Company shall reimburse the Executive
for the premiums paid by him associated with such continued
coverage under the Company’s group health insurance plan and
under the Exec-U-Care medical insurance policy maintained by the
Company (up to $15,000 per calendar year) until the earlier of
(I) the end of the Executive’s entitlement to continued
coverage under the Company’s group health insurance plan
pursuant to COBRA, or (II) the date on which the Executive
becomes covered by a health plan sponsored or offered by another
employer or person. The Executive hereby forever releases, waives
and relinquishes any and all benefits, payments, rights, claims and
interests in and under all plans, programs, arrangements and
policies sponsored, maintained or offered by the Company or any of
its subsidiaries other than as expressly set forth
above.
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(b) Retirement Status . The
Executive understands and agrees that he has not satisfied the
requirements for retirement or early retirement under any of the
plans, programs, arrangements or policies referenced in Section
5(a) above.
Section 6 . Severance Payment . So long as the
Executive has executed the Release of Claims attached hereto as
Exhibit A , the Company shall pay a severance payment
to the Executive in the aggregate amount of Seven Hundred Eighty
Thousand Dollars ($780,000) (“Severance Payment”),
which shall be paid in accordance with this Section. The payment of
the Severance Payment shall be suspended for a six-month period
following the Effective Time as required by Section 409A of
the Internal Revenue Code of 1986, as amended, because the
Executive is a Specified Employee as defined in Treasury Regulation
§1.409A-1(h). On December 31, 2008, the Executive shall
receive twenty-five percent (25%) of the Severance Payment in a
lump sum payment equal to $195,000. The Executive shall receive the
remaining seventy-five percent (75%) of the Severance Payment in
eighteen (18) equal monthly installments of Thirty Two
Thousand Five Hundred Dollars ($32,500) each beginning on
January 31, 2009 and on the last day of each month thereafter
through June 30, 2010. The Company shall deduct all required
taxes and withholdings from the lump sum portion and the monthly
installments of the Severance Payment.
Notwithstanding the foregoing or the termination
of Section 5(g) of the Employment Agreement, the Severance Payment
payable to the Executive under this Agreement shall (a) be
subject to termination or reduction in the same manner provided in
Section 5(g) of the Employment Agreement applicable to
“Monthly Severance Payments,” and (b) terminate
immediately without reinstatement of any obligation of the Company
to resume paying the Severance Payment hereunder if the Executive
breaches any of the provisions of this Agreement (or the Release of
Claims attached hereto as Exhibit A ) or any of the
sections of the Employment Agreement that survive the Effective
Time. The lump sum payment specified in the preceding paragraph
shall be subject to termination or reduction on a pro-rata basis in
the event that, had the Executive been able to receive monthly
installments of the Severance Payment commencing as of the
Effective Time, any of such monthly installments would have been
terminated or reduced between the Effective Time and
December 31, 2008 in the same manner provided in
Section 5(g) of the Employment Agreement.
The Executive agrees that the Severance Payment
payable under this Agreement constitutes full satisfaction and
discharge of the Company’s obligations under the Employment
Agreement. The Executive further agrees that the Severance Payment
payable under this Agreement constitutes adequate consideration for
his covenants and agreements set forth in the Release of Claims
attached hereto as Exhibit A , Section 6
(Non-Disclosure, etc.), Section 7 (Non-Competition), Section 8
(Non-Solicitation) and Section 9 (Intellectual Property) of
the Employment Agreement, which covenants and agreements the
Executive agrees and affirms are applicable to him in accordance
with their terms.
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In consideration of the Company’s
obligation to pay the Severance Payment to the Executive under this
Agreement, subject to termination or reduction as provided above,
the Executive hereby forever releases, waives and relinquishes any
and all salary, compensation, employee benefits, payments,
incentive compensation awards, bonuses and other amounts from the
Company and any of its subsidiaries or affiliates (whether under
the Employment Agreement, the 2007 Incentive Plan or any other
plan, program, arrangement, policy or promise of the Company or any
of its subsidiaries or affiliates, or otherwise) other than
(i) the Severance Payment, (ii) reimbursement for
premiums
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