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Exhibit
10.18
KEY MANAGEMENT SEVERANCE
AGREEMENT
This Severance Agreement (the
“Agreement”) is made as of October 1, 2002 by and
between OWENS CORNING, a Delaware corporation (the
“Company”), and Sheree L. Bargabos, an officer of the
Company (“Executive”).
WHEREAS the Compensation
Committee of the Board of Directors of the Company (the
“Committee”) has approved a severance agreement to
provide Executive with certain protections and to conform the terms
of such agreement to the current policy of the Company regarding an
officer’s entitlement to pay, benefits and privileges on the
termination of her employment;
NOW THEREFORE, the parties
hereto agree as follows:
| 1. |
Termination Absent a Change of Control . |
| a) |
If, prior to a Change of Control (as defined in paragraph 7(c)
below), (i) the Company terminates Executive’s
employment for any reason other than Permanent Total Disability or
Cause (as defined in paragraphs 7(e) and 7(b)(1)&(2),
respectively, below), or (ii) Executive voluntarily terminates
her employment under circumstances involving a Constructive
Termination (as defined in paragraph 7(d), below), Executive will
be entitled to the following compensation, provided that Executive
executes a Release and Non-Competition Agreement satisfactory to
the Company: |
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1) |
Base salary earned and as yet unpaid through the effective date
of termination; and |
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2) |
Two years’ Base Pay (as defined in paragraph 7(a) below);
and |
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3) |
Two times Executive’s Separation Incentive Payment (as
defined in paragraph 7(f) below); and |
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4) |
Incentive Pay as yet unpaid from the prior fiscal year and
Incentive Pay for the fiscal year of termination, prorated for the
period of Executive’s actual employment prior to termination;
and |
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5) |
The greater of (i) Executive’s vested Pension
Benefit under the Company’s Salaried Employees’ (Final
Average) Retirement Plan or (ii) Executive’s vested Cash
Balance Pension Benefit. |
| b) |
If, prior to a Change of Control, the Company terminates
Executive’s employment for Cause (as defined in paragraph
7(b)(3), below), Executive will only be entitled to base salary
earned and as yet unpaid through the effective date of termination
and Executive’s vested Final Average Plan Pension Benefit or
vested Cash Balance Pension Benefit, whichever is greater, UNLESS,
(i) the Company exercises its discretion to award Executive
(in addition to the aforementioned base salary and vested pension
amounts) some portion of the following compensation, based on
effort expended and results obtained to date and
(ii) Executive executes a Release and Non-Competition
Agreement satisfactory to the Company: |
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1) |
Up to but no more than Twelve months’ Base Pay (as
defined in paragraph 7(a) below); and |
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2) |
Up to but no more than One times Executive’s Separation
Incentive Payment (as defined in paragraph 7(f) below);
and |
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3) |
Up to but no more than the amount of Incentive Pay as yet
unpaid from the prior fiscal year. |
1
| c) |
The compensation payable under paragraph 1(a) or 1(b), above,
shall be paid as soon as practicable after Executive signs, returns
and does not revoke the requisite Release and Non-Competition
Agreement. |
| d) |
In the event of a termination of Executive’s employment
under the circumstances described in paragraph 1(a)
above: |
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1) |
All stock options previously awarded to Executive shall, to the
extent not already vested, immediately vest, and shall be
exercisable (subject to applicable blackout restrictions) for up to
six months following the date of termination or the original
expiration date, whichever is sooner. |
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2) |
All shares of restricted stock previously awarded to Executive
shall, to the extent not already vested, immediately vest and be
payable. |
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3) |
All outstanding but unearned performance shares shall be
forfeited. |
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4) |
All of Executive’s non-qualified deferred compensation or
retirement benefits, if any, accrued through the date of
termination under any non-qualified deferred compensation plan or
arrangement shall immediately vest and be payable, to the extent
permissible under the terms of such plan or
arrangement. |
| e) |
In the event of a termination of Executive’s employment
under the circumstances described in paragraph 1(b)
above: |
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1) |
All stock options previously awarded to Executive which are
exercisable on the date of termination shall be exercisable
(subject to applicable blackout restrictions) for up to six months
following the date of termination or the original expiration date,
whichever is sooner. |
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2) |
All unvested shares of restricted stock and all outstanding but
unearned performance shares previously awarded to Executive shall
be forfeited. |
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3) |
All of Executive’s non-qualified deferred compensation or
retirement benefits, if any, accrued and vested through the date of
termination under any non-qualified deferred compensation plan or
arrangement shall be payable, to the extent permissible under the
terms of such plan or arrangement. |
| f) |
If Executive’s employment ends under circumstances
described in paragraph 1(a) above as a result of the sale by the
Company of a business unit, division or facility, payments will be
made under this paragraph 1 only if Executive is not offered a
substantially equivalent position with the Company or with the new
owner of the business (without regard to whether Executive accepts
such a position). If Executive receives and accepts a suitable
offer from the new owner of the business and is subsequently
terminated within one year of the closing date of the sale under
circumstances that would result in payment of benefits under this
paragraph 1(a), Executive will be treated as though she had been
terminated by the Company and receive the payments provided for in
this Agreement, less any amounts or benefits provided by the new
owner in connection with Executive’s termination. |
| 2. |
Termination On or After a Change of Control
. |
| a) |
If, within a
two-year period after a Change of Control, (i) the Company (or
any successor) terminates Executive’s employment for any
reason other than Permanent Total Disability or Cause (as defined
in paragraphs 7(e) and 7(b)(1)&(2), respectively,
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2
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below), or
(ii) Executive voluntarily terminates her employment under
circumstances involving a Constructive Termination, Executive will
be entitled to the following compensation, provided that Executive
executes a Release and Non-Competition Agreement satisfactory to
the Company:
|
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1) |
Base salary earned and as yet unpaid through the effective date
of termination; and |
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2) |
Two years’ Base Pay; and |
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3) |
Two times Executive’s Separation Incentive Payment;
and |
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4) |
Incentive Pay as yet unpaid from the prior fiscal year and
Target Level Incentive Pay (as defined in paragraph 7(h) below) for
the fiscal year of termination, prorated for the period of
Executive’s actual employment prior to termination;
and |
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5) |
The greater of (i) Executive’s vested Pension
Benefit under the Company’s Salaried Employees’ (Final
Average) Retirement Plan or (ii) Executive’s vested Cash
Balance Pension Benefit. |
| b) |
If, within a two-year period after a Change of Control, the
Company (or any successor) terminates Executive’s employment
for Cause (as defined in paragraph 7(b)(3), below, Executive will
only be entitled to base salary earned and as yet unpaid through
the effective date of termination and Executive’s vested
Final Average Plan Pension Benefit or vested Cash Balance Pension
Benefit, whichever is greater, UNLESS, (i) the Company
exercises its discretion to award Executive (in addition to the
aforementioned base salary and vested pension amounts) some portion
of the following compensation, based on effort expended and results
obtained to date and (ii) Executive executes a Release and
Non-Competition Agreement satisfactory to the Company: |
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1) |
Up to but no more than Twelve months’ Base Pay (as
defined in paragraph 7(a) below); and |
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2) |
Up to but no more than One times Executive’s Separation
Incentive Payment (as defined in paragraph 7(f) below);
and |
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3) |
Up to but no more than the amount of Incentive Pay as yet
unpaid from the prior fiscal year. |
| c) |
The compensation payable under paragraphs 2(a) or 2(b), above,
will be paid as soon as practicable after Executive signs, returns
and does not revoke the requisite Release and Non-Competition
Agreement. |
| d) |
In the event of a termination of Executive’s employment
under the circumstances described in paragraph 2(a)
above: |
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1) |
All stock options previously awarded to Executive shall, to the
extent not already vested, immediately vest, and shall be
exercisable (subject to applicable blackout restrictions) for up to
six months following the date of termination or the original
expiration date, whichever is sooner. |
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2) |
All shares of restricted stock previously awarded to Executive
shall, to the extent not already vested, immediately vest and be
payable. |
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3) |
All outstanding but unearned performance shares shall be
forfeited. |
3
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4) |
All of Executive’s non-qualified deferred compensation or
retirement benefits, if any, accrued through the date of
termination under any non-qualified deferred compensation plan or
arrangement shall immediately vest and be payable, to the extent
permissible under the terms of such plan or
arrangement. |
| e) |
In the event of a termination of Executive’s employment
under the circumstances described in paragraph 2(b)
above: |
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1) |
All stock options previously awarded to Executive which are
exercisable on the date of termination shall be exercisable
(subject to applicable blackout restrictions) for up to six months
following the date of termination or the original expiration date,
whichever is sooner. |
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2) |
All unvested shares of restricted stock and all outstanding but
unearned performance shares previously awarded to Executive shall
be forfeited. |
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3) |
All of Executive’s non-qualified deferred compensation or
retirement benefits, if any, accrued and vested through the date of
termination under any non-qualified deferred compensation plan or
arrangement shall be payable, to the extent permissible under the
terms of such plan or arrangement. |
| f) |
The Compensation Committee of the Board of Directors, in its
sole discretion, may determine that no Change of Control or
Potential Change of Control shall be deemed to ha |
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