Exhibit
10.17
KEY MANAGEMENT SEVERANCE
AGREEMENT
This Severance Agreement (the
“Agreement”) is made as of December 1, 2008
by and between OWENS CORNING, a Delaware corporation and its
subsidiaries (the “Company”), and Sheree L.
Bargabos , an officer of the Company
(“Executive”).
WHEREAS the Company desires to provide Executive with
certain severance pay and benefits, and to expose Executive to
confidential Company information, each in exchange for
Executive’s commitment to keep such information confidential
and to not engage in competitive activities with the Company for
the duration of Executive’s employment and for two years
thereafter;
WHEREAS the Compensation Committee of the Board of
Directors of the Company (the “Committee”) has approved
this Severance Agreement to provide Executive with certain
severance pay, benefits and privileges on the termination of
Executive’s employment as described below;
NOW THEREFORE
, the parties hereto agree as
follows:
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1.
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Company
Initiated Termination For Reasons Other than Cause and
Unsatisfactory Performance . If
the Company terminates Executive’s employment for any reason
other than Unsatisfactory Performance or Cause (as defined in
paragraphs 10(g) and 10(b), respectively), or Executive voluntarily
terminates Executive’s employment under circumstances
involving a Constructive Termination, as defined in paragraph
10(d), 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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a.
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Severance
payment in an amount equal to Base Pay, as defined in paragraph
10(a); and
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b.
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Separation
Incentive Payment, as defined in paragraph 10(e).
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2.
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Company
Initiated Termination For Unsatisfactory Performance
. If
the Company terminates Executive’s employment for
Unsatisfactory Performance, as defined in paragraph 10(g),
Executive will be entitled only to the following compensation,
provided that Executive executes a Release and Non-Competition
Agreement satisfactory to the Company:
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a.
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Severance
payment equal to 50% of Base Pay, as defined in paragraph 10(a);
and
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b.
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Severance
payment equal to 50% of a Separation Incentive Payment, as defined
in paragraph 10(e).
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3.
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Company
Initiated Termination For Cause . If
the Company terminates Executive’s employment for Cause, as
defined in paragraph 10(b), Executive will be entitled only to base
salary earned and as yet unpaid through the effective date of
termination.
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4.
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Timing of Payments
. Compensation
payable under paragraphs 1 or 2 above after a Change of Control
shall be paid in a lump sum as soon as practicable after
termination (no later than the 15 th day of the third month
following the termination). Compensation payable under paragraphs 1
or 2 above absent a Change of Control will be made through the
normal payroll cycle over 24 months. All payments will be made
minus applicable withholdings.
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5.
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Sale of Business
. If Executive’s employment
ends under circumstances described in paragraph 1 above in
connection with the sale by the Company of a subsidiary, business
unit, division or facility, payments will be made under this
Agreement only if Executive is not offered a position with
materially equivalent base salary 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
Agreement, Executive will be treated as though he had been
terminated by
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1
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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.
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6.
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Termination
For Other Reasons . If
Executive voluntarily terminates employment including by reason of
retirement (other than as provided in paragraph 1 above with regard
to Constructive Termination), or if Executive’s employment
terminates due to death or Permanent Total Disability, Executive
shall not be entitled to any benefits under this
Agreement.
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7.
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Continuation
of Insurance Benefits . In
the event Executive’s employment terminates under the
circumstances described in paragraph 1 or 2 of this Agreement, the
Company will continue Executive’s participation and coverage
for a period of one year or six months, respectively (the
“Severance Period”) from Executive’s last day of
employment with the Company under the Company’s medical and
dental plans, in which Executive is participating immediately prior
to such employment termination, subject to the Company’s
right to modify the terms of the plans or arrangements providing
these benefits. If Executive is employed by another entity during
the Severance Period, the Company will immediately become a
secondary obligor.
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8.
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Non-Duplication
of Benefits . Any
compensation or benefits payable under the terms of this Agreement
will be offset and not augmented by other compensation or benefits
of the same or similar type payable under local laws of the
Executive’s country, any existing plan or agreement of the
Company or any other arrangement between Executive and the Company
covering the Executive (including, but not limited to, any Company
severance policy and the Company’s Annual Incentive Plan). It
is intended that this Agreement not duplicate benefits Executive is
entitled to under country “redundancy” laws, the
Company’s regular severance policy, any related policies, or
any other contracts, agreements or arrangements between Executive
and the Company.
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9.
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Term
.
This Agreement shall be effective from the date hereof throughout
Executive’s term of employment as an officer of the Company,
but shall expire and be of no effect immediately after the second
anniversary of either: (a) a Change of Control or
(b) written notice of intent to terminate this Agreement by
the Company’s Chief Executive Officer, whichever shall occur
first. Executive’s Confidentiality, Non-Solicitation and
Non-Competition obligations set forth herein shall survive the
termination or expiration of this Agreement, provided however, that
if Executive has become entitled to any payments pursuant to this
Agreement before such second anniversary which have not been paid
by such second anniversary, such payments shall be made pursuant to
the terms of this Agreement.
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10.
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Certain
Defined Terms . As
used herein, the following terms shall have the following
meanings:
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a)
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“Base
Pay” shall mean the greater of two times the annual salary
paid to Executive as of the date of termination or the date of a
Change of Control, as the case may be, notwithstanding any pay
reduction that may be related to a Constructive
Termination.
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1)
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Conviction
of any felony or failure to contest prosecution of a felony;
or
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2)
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Willful
misconduct or dishonesty that is harmful to the Company’s
business or reputation; or
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3)
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Serious
violation of the Company’s Business Code of
Conduct.
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c)
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“Change
of Control” shall have the same meaning and definition as set
forth in the 2006 Stock Plan approved by the shareholders, and is
incorporated herein by reference.
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d)
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“Constructive
Termination” shall be deemed to have occurred only
if:
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2
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1)
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Prior
to a Change of Control: Executive’s Base Pay is materially
reduced without Executive’s written consent; or
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2)
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On or
within a two-year period after a Change of Control:
(A) Executive’s Base Pay or annual incentive pay
opportunity is materially reduced without Executive’s written
consent; (B) Executive is required by the Company to relocate
to a new place of business that is more than fifty miles from
Executive’s place of business prior to the Change of Control
(or the Company mandates a substantial increase in the amount of
required business travel); or (C) there is a material adverse
change in Executive’s duties or responsibilities in
comparison to the duties or responsibilities which Executive had
prior to the Change of Control; and
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3)
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The
amount, time and form of any payment on account of the constructive
termination must be substantially identical to that which would be
paid due to an actual involuntary termination, to the extent such a
right exists; and
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4)
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The
Executive is required to notify the Company that one of the
constructive termination triggers described above exists within a
period not to exceed 90 days of the time Executive becomes aware
the trigger first existed and the company has 30 days from such
notice to cure any Constructive Termination.
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e)
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“Separation
Incentive Payment” shall equal two times Executive’s
Target Incentive Level in the Company’s annual, Corporate
Incentive Plan (CIP) immediately prior to termination.
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