EXHIBIT 10.89
SEVERANCE
AGREEMENT AND GENERAL RELEASE
This Severance Agreement and General
Release (the “Severance Agreement”) is between USEC
Inc., a Delaware corporation (“USEC” or the
“Company”) and Lisa E. Gordon-Hagerty
(“Executive”) (USEC and Executive being sometimes
referred to herein individually as the “Party” and
collectively as the “Parties”).
WHEREAS, pursuant to an employment
agreement dated as of December 15, 2003 (the “Employment
Agreement”) Executive has been employed by USEC in the
capacity of Executive Vice President and Chief Operating
Officer;
WHEREAS, the Company has determined
to realign its operations and eliminate the position of Executive
Vice President and Chief Operating Officer, and, as a result,
Executive and the Company have agreed that Executive’s
services are no longer required by the Company; and
WHEREAS, in exchange for, among other
things, Executive’s full release of claims against the
Company and the other covenants and agreements contained herein,
the Company hereby offers Executive the severance package described
in this Severance Agreement, which severance package is in addition
to certain severance and other benefits provided to Executive
pursuant to the Employment Agreement in the event of a termination
of employment;
NOW THEREFORE, IT IS HEREBY AGREED by
and between Executive and USEC as follows:
1. CHANGE IN EXECUTIVE’S DUTIES
Notwithstanding anything to the contrary in Section 2 of the
Employment Agreement, the Parties agree that
(a) Executive’s employment shall be terminated effective
as of September 30, 2005 and (b) from September 7,
2005 until September 30, 2005, Executive’s duties shall
be limited to facilitating the transition of her duties and
responsibilities and accordingly, effective as of September 7,
2005, Executive shall no longer serve as the Executive Vice
President and Chief Operating Officer of the Company or as an
officer or director of any direct or indirect subsidiary of the
Company or as a member of any committee or other governing body of
the Company or of any direct or indirect subsidiary of the
Company.
2. EXECUTIVE’S TERMINATION UNDER THE
EMPLOYMENT AGREEMENT
(a) The Parties agree that, in
accordance with Section 4(b) of the Employment Agreement, as of the
Date of Termination, Executive is terminated by the Company without
Cause (as such term is defined in the Employment Agreement).
Executive acknowledges and agrees that the delivery to Executive by
the Company of this Severance Agreement constitutes full and proper
notice under Section 4(d) of the Employment Agreement and hereby
irrevocably waives any additional requirements for Notice of
Termination in connection with Executive’s termination
without Cause pursuant to Section 4(d) of the Employment Agreement.
Notwithstanding anything to the contrary in Section 4(e) of the
Employment Agreement, the Parties acknowledge and agree that the
Executive’s “Date of Termination” for purposes of
the Employment Agreement and this Severance Agreement shall be
September 30, 2005. Executive acknowledges and agrees that the
provisions of the Employment Agreement that survive termination of
employment, including but not limited to Section 9 (relating
to confidential information, non-solicitation and non-competition),
remain in full force and effect following the Date of Termination
and are not affected by this Severance Agreement.
(b) The Parties acknowledge and
agree that, pursuant to the terms of Sections 5(a)(i) and (ii)
of the Employment Agreement, the Company shall pay to Executive,
within ten (10) days of the Date of Termination, a lump sum
amount equal to $1,158,336 plus any outstanding portion of
Executive’s earned Annual Base Salary through the Date of
Termination and any accrued vacation pay to the extent not
previously paid, minus any federal, state and local taxes required
to be withheld pursuant to any applicable law or regulation or
otherwise authorized by Executive. Executive agrees this represents
full payment of all amounts due by the Company to Executive under
Sections 5(a)(i) and (ii) of the Employment Agreement. The
Parties further acknowledge and agree that, pursuant to and in
accordance with the terms of Section 5(a)(iii) and
Section 5(a)(iv) of the Employment Agreement, the Company
shall continue to provide to Executive, for the period specified in
Section 5(a)(iii) of the Employment Agreement, any life,
disability, accident and/or health insurance that she was receiving
immediately prior to the Date of Termination, and Executive’s
stock options (vested or nonvested) shall become exercisable and
shall remain exercisable for one year (but not exceeding the term
of the stock options) and all restrictions pertaining to restricted
stock shall lapse on the Date of Termination.
(c) The Parties acknowledge and
agree that, in accordance with Section 3(e) of the Employment
Agreement, the Company shall reimburse Executive for all reasonable
expenses incurred by Executive in the performance of her duties
under the Employment Agreement in accordance with policies
applicable to employees of the Company at the time of the expenses.
The Parties agree that prior to the Date of Termination, Executive
shall submit any unsubmitted expenses for which Executive is
entitled to reimbursement in accordance with the Company’s
policies and the Company shall make payment to Executive for such
expenses within ten (10) days of the Date of Termination.
Notwithstanding the foregoing, the Company agrees that within
thirty (30) days of submission of appropriate documentation,
and consistent with the Company’s policies for travel expense
reimbursement, it shall also reimburse Executive for reasonable
expenses incurred by Executive in attending Fortune
magazine’s “Most Powerful Women Summit” in
Pasadena, California on November 7-9, 2005; it being understood and
agreed that Executive shall not be participating in such conference
on behalf of the Company and shall not hold herself out as a
representative or agent of the Company.
3. ADDITONAL SEVERANCE BENEFITS .
(a) In addition to the benefits
provided under the Employment Agreement and in full consideration
of Executive’s execution of this Severance Agreement, and
Executive’s agreement to be legally bound by its terms, the
Company agrees:
(i) to provide Executive with
up to six (6) months of outplacement counseling and services
through a provider retained by the Company or a provider selected
by Executive, provided that the cost, which shall be paid monthly,
shall not exceed $15,000 in the aggregate, and in no event will the
Company be obligated to provide cash in lieu of any outplacement
services;
(ii) to pay the
Executive’s share of costs to continue Executive’s
life, disability, accident and health insurance benefits provided
under Section 5(a)(iii) of the Employment Agreement for the
period of time for which such benefits are provided pursuant to
Section 5(a)(iii) of the Employment Agreement; and
(iii) to pay to Executive the RSU Payment described in Section
3(b) below on the date that payment is due with respect to
restricted stock units granted to officers of the Company under the
USEC Inc. 1999 Equity Incentive Plan, as amended, with respect to
the performance period commencing on July 1, 2004 and ending
on June 30, 2007 (the “2004-2007 Performance
Period”) (which date of payment shall be promptly following
the date on which the Company’s Compensation Committee shall
have certified the extent to which the applicable performance goals
have been obtained following the end of the 2004-2007 Period).
(b) The “RSU
Payment” shall be an amount equal to (a) the amount
payable at such time with respect to a target number of 62,288
restricted stock units multiplied by the “Performance
Adjustment” determined by the Compensation Committee in its
sole discretion at the end of the 2004-2007 Period based on the
Compensation Committ
