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Exhibit
10.17
SEPARATION AGREEMENT
AND
GENERAL
RELEASE
This Separation Agreement and
General Release (the “ Separation Agreement and General
Release ”) is made and entered into as of the 7th day of
June, 2007 by and among Wayne Hewett (hereinafter referred to as
the “ Executive ”) and MOMENTIVE PERFORMANCE
MATERIALS, INC., a Delaware corporation (the “ Company
”) and for purposes of Section 4 of this Agreement,
MOMENTIVE PERFORMANCE MATERIALS HOLDING INC. (“
Holdings ”). Capitalized terms used and not defined
herein shall have the meaning as provided in the Employment
Agreement (as defined below).
W I T N E S S E T H
:
WHEREAS, the Executive and
the Company are parties to an Employment Agreement dated as of
March 19, 2007 (the “ Employment Agreement
”); and
WHEREAS, pursuant to
Section 2(c)(ix) of the Employment Agreement and the
Subscription Agreement by and among the Executive and Holdings,
dated as of February 28, 2007 (the “ Subscription
Agreement ”), the Executive purchased 10,425 shares of
Holdings common stock for an aggregate purchase price of $1,042,500
on March 30, 2007 (such purchased shares, the “
Purchased Shares ”); and
WHEREAS, the Executive has
agreed (i) effective as of June 8, 2007 (the “
CEO Start Date ”) to resign from his position as Chief
Executive Officer (“ CEO ”) of the Company and
to remain a non-officer employee of the Company through the 30-day
period after the CEO Start Date (the last day of such period, the
“ Resignation Date ”) and (ii) to resign
all offices, directorships and similar positions with the Company,
its subsidiaries and related entities (including, without
limitation, Holdings), including the Executive’s position as
a non-officer employee of the Company, as an officer of Holdings
and as a member of the Board of Directors of each of the Company
and Holdings; and
WHEREAS, the Executive and
the Company have agreed that the Executive’s termination of
employment as of the Resignation Date will be treated as a
termination by the Executive for Good Reason under
Section 3(d) of the Employment Agreement; and
WHEREAS, the parties wish to
amend the Employment Agreement to reflect the foregoing and to
resolve any and all outstanding issues and claims that may arise
out of the Employment Agreement, the Executive’s employment
by the Company, its subsidiaries and affiliates and the
Executive’s termination of employment; and
WHEREAS, pursuant to
Section 4(e) of the Employment Agreement, upon a termination
of the Executive’s employment for any reason on or before
January 3, 2008, the Company or Holdings is required to
purchase all of Executive’s Purchased Shares within 30 days
following the Resignation Date for the total purchase price paid by
the Executive for such Purchased Shares and pay to the Executive
such purchase price by check or wire upon delivery by the Executive
of the certificates for such Purchased Shares.
NOW, THEREFORE, in
consideration of the mutual promises herein contained, it is agreed
as follows:
1. Resignation .
Effective as of the CEO Start Date, (i) the Executive shall no
longer hold the position of CEO, but shall remain employed by the
Company as a non-officer employee through the Resignation Date and
shall diligently and in good faith perform all duties requested of
him through the Resignation Date and (ii) the Executive shall
resign from any offices, directorships, similar positions and other
affiliations that the Executive holds or has with the Company,
Holdings and their respective subsidiaries, affiliates and related
entities (collectively, the “ Company Entities ”
and each, a “ Company Entity ”), including,
without limitation, his position as an officer of Holdings and as a
member of the Board of Directors of each of the Company and
Holdings. Effective as of the Resignation Date, the Executive shall
no longer serve as a non-officer employee of the Company. A copy of
the Executive’s resignation is attached hereto as Exhibit
A . Notwithstanding Sections 3(d), (f) and (g) of the
Employment Agreement regarding notice of termination of the
Executive’s employment, the Date of Termination (as defined
in the Employment Agreement) shall be the Resignation Date. The
Company and the Executive agree that the Executive’s
resignation will be treated as a termination by the Company for
Good Reason under Section 3(d) of the Employment
Agreement.
2. Severance Payments
. Subject to the Executive’s compliance with the terms of
this Resignation Agreement and General Release, the Company agrees
to provide the Executive with the payments and benefits set forth
in Section 4(a)(ii)-(iv) of the Employment Agreement
commencing upon the Second Revocation Date (as defined below) as
modified by Exhibit C annexed hereto, provided ,
that, as of the Resignation Date, the Executive executes and, prior
to the Second Revocation Date does not revoke, a release
substantially in the form set forth on Exhibit B annexed
hereto. The Company also agrees to provide the Executive with
(i) the payments set forth in Section 4(a)(i) of the
Employment Agreement on the Second Revocation Date and
(ii) the payments set forth in Section 2(c)(v) of the
Employment Agreement in accordance with the provision of such
Section 2(c)(v). The payments contemplated by Sections 2(c)(v)
and 4(a)(i) – (iv) of the Employment Agreement (as
modified by Exhibit C annexed hereto) shall be comprised of
the amounts set forth on Exhibit C annexed hereto. The
“ Second Revocation Date ” shall be the date
that is seven (7) days after the date on which the Executive
signs the release set forth on Exhibit B to this Separation
Agreement and General Release.
3. Reimbursement for
Business Expenses . The Company agrees to reimburse the
Executive for all business expenses actually and reasonably
incurred by the Executive in the performance of his duties during
his employment in accordance with the Company policy and for which
the Executive provides appropriate documentation.
4. Share Repurchase .
Holdings hereby agrees to purchase the Purchased Shares for an
aggregate purchase price of $1,042,500, which amount shall be paid
by Holdings to Executive by check or wire transfer of such amount
in a single payment no later than July 15, 2007.
5. No Other Benefits .
Except as specifically set forth in this Separation Agreement and
General Release, the Executive expressly acknowledges and agrees
that,
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effective as of the Resignation Date,
the Executive is not entitled to receive any severance pay,
severance benefits, compensation or employee benefits of any kind
whatsoever from the Company or any of the Company Entities, and all
of the Executive Options held by the Executive shall terminate as
of the Resignation Date.
6. Executive’s
Release of the Company Entities . (a) In consideration for
the payments set forth in paragraph 2 , the Executive for
himself, his heirs, administrators, representatives, executors,
successors and assigns (collectively “ Releasers
”) hereby irrevocably and unconditionally releases, acquits
and forever discharges and agrees not to sue the Company or any
Company Entity or any of its or their subsidia
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