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KEY MANAGEMENT SEVERANCE AGREEMENT

Termination Severance Agreement

KEY MANAGEMENT SEVERANCE AGREEMENT | Document Parties: OWENS CORNING You are currently viewing:
This Termination Severance Agreement involves

OWENS CORNING

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Title: KEY MANAGEMENT SEVERANCE AGREEMENT
Date: 2/18/2009
Industry: Containers and Packaging     Sector: Basic Materials

KEY MANAGEMENT SEVERANCE AGREEMENT, Parties: owens corning
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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:

 

1.

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:

 

 

a.

Severance payment in an amount equal to Base Pay, as defined in paragraph 10(a); and

 

 

b.

Separation Incentive Payment, as defined in paragraph 10(e).

 

2.

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:

 

 

a.

Severance payment equal to 50% of Base Pay, as defined in paragraph 10(a); and

 

 

b.

Severance payment equal to 50% of a Separation Incentive Payment, as defined in paragraph 10(e).

 

3.

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.

 

4.

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.

 

5.

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

 

1


 

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.

 

6.

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.

 

7.

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.

 

8.

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.

 

9.

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.

 

10.

Certain Defined Terms . As used herein, the following terms shall have the following meanings:

 

 

a)

“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.

 

 

b)

“Cause” shall mean:

 

 

1)

Conviction of any felony or failure to contest prosecution of a felony; or

 

 

2)

Willful misconduct or dishonesty that is harmful to the Company’s business or reputation; or

 

 

3)

Serious violation of the Company’s Business Code of Conduct.

 

 

c)

“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.

 

 

d)

“Constructive Termination” shall be deemed to have occurred only if:

 

2


 

1)

Prior to a Change of Control: Executive’s Base Pay is materially reduced without Executive’s written consent; or

 

 

2)

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

 

 

3)

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

 

 

4)

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.

 

 

e)

“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.

 

 

f)

“Target Ince


 
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