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SEPARATION AGREEMENT BETWEEN JOHNSONDIVERSEY, INC. AND EDWARD J. KENNEDY

Termination Severance Agreement

SEPARATION AGREEMENT BETWEEN JOHNSONDIVERSEY, INC. AND EDWARD J. KENNEDY | Document Parties: JOHNSONDIVERSEY INC You are currently viewing:
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JOHNSONDIVERSEY INC

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Title: SEPARATION AGREEMENT BETWEEN JOHNSONDIVERSEY, INC. AND EDWARD J. KENNEDY
Governing Law: Wisconsin     Date: 3/27/2009

SEPARATION AGREEMENT BETWEEN JOHNSONDIVERSEY, INC. AND EDWARD J. KENNEDY, Parties: johnsondiversey inc
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Exhibit 10.36

SEPARATION AGREEMENT BETWEEN

JOHNSONDIVERSEY, INC. AND EDWARD J. KENNEDY

 

Date:

 

November 17, 2008

  

From:

 

Edward F. Lonergan

  

PERSONAL & CONFIDENTIAL

To:

 

Edward J. Kennedy

  

The following sets forth our mutual agreement (“Agreement”) regarding your separation from JohnsonDiversey, Inc. (the “Company”):

1. Employment and Resignation.

a. Resignation. You hereby submit and the Company hereby accepts your irrevocable written resignation as Senior Vice President and Regional President- APAC/Japan of the Company effective December 26, 2008 or such earlier date which is the first to occur of the following: (i) such date as the Company shall select on prior written notice to you as provided in Section 10.j, or (ii) the date you incur a “separation from service” (as such phrase is defined in Internal Revenue Code Section 409A and the regulations promulgated thereunder) with the Company, its subsidiaries and affiliates (such date of resignation being herein referred to as the “Termination Date”).

b. Position and Duties. Effective as of the date first written above (the “Effective Date”) and continuing through the Termination Date (the “Transition Period”), you will continue as Senior Vice President and President-APAC/Japan of the Company and will perform such duties as shall be assigned by the Chief Executive Officer (“CEO”) of the Company.

c. Terms and Conditions . During the Transition Period, your current base salary of $325,000 (“Base Salary”) and employee benefits, each as in effect as of the Effective Date, shall continue in effect; provided, however, any change in employee benefits effective during the Transition Period that is applicable to employees of the Company generally shall also be applicable to you.

2. Termination . Notwithstanding Sections 1.a, 1.b and 1.c, or any other provision of this Agreement, the termination of your employment hereunder will be governed by the following provisions:

a. Death . If you die prior to the end of the Transition Period, the Company will pay your beneficiaries or estate, as appropriate, promptly after your death but not later than December 31, 2008, the unpaid Base Salary to which you are entitled, pursuant to Section 1.c, through the date of your death, a bonus prorated at target level for the fiscal year in which the death occurs, your accrued but unused vacation, incurred but unreimbursed business expenses, plus (without duplication) any amounts otherwise due under applicable law or pursuant to any benefit plan or policy that is maintained by the Company or its subsidiaries or affiliates in which you participated, and your beneficiaries or estate will be entitled to no other compensation or


benefits. The Company will also pay your beneficiaries or estate, as appropriate, a Cash LTIP payment for any open performance cycle based on actual performance prorated to date of death, with payment to be made when awards for such cycle are paid to the other participants.

b. Cause.

(i) The Company may terminate your employment hereunder for Cause (as defined below) prior to the end of the Transition Period by written notice as provided in Section 10.j. If you are terminated for Cause, the Company will promptly pay to you (or your representative) the unpaid Base Salary to which you are entitled, pursuant to Section 1.c, through the date you are terminated and you will be entitled to no other compensation or benefits, except as otherwise due to you under applicable law or pursuant to any benefit plan or policy that is maintained by the Company or its subsidiaries or affiliates in which you participated.

(ii) For purposes of this Agreement, “Cause” means:

(A) Material breach of this Agreement, including a material failure to perform within the provisions of “This We Believe,” after having received prior written notice of such material breach and you have not corrected such material breach (if capable of correction) to the reasonable satisfaction of the President and CEO within the thirty (30) day period following your receipt of such written notice.

(B) Willful misconduct, or willful violation of the law in the performance of duties under this Agreement.

(C) Willful failure or refusal to follow reasonable, explicit, and lawful instructions or directions from the President and CEO concerning the operation of Company business.

(D) Conviction of a felony.

(E) Theft or misappropriation of funds or property of Company, or commission of any material act of dishonesty involving Company, its employees, or business.

(F) Appropriating any corporate opportunity of Company, unless the transaction was approved in writing by the President and CEO following full disclosure of all pertinent details of the transaction.

(G) Breach of fiduciary duty owed to Company as an executive of Company.

(H) Material breach of any duty or obligation under the attached Confidentiality Agreement, Non-Competition Agreement, and/or Trade Secret, Invention, and Copyright Agreement, after having received prior written notice of

 

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such material breach and you have not corrected such material breach (if applicable of correction) to the reasonable satisfaction of the President and CEO within the thirty (30) day period following your receipt of such written notice.

For purposes of this Section 2, no act or failure to act on your part shall be considered “willful” unless it is done, or omitted to be done, by you in bad faith or without reasonable belief that your action or omission was in the best interest of the Company.

3. Severance Pay and Benefits . Unless your employment has been terminated by reason of death or Cause as provided in Section 2 and subject to the terms of this Agreement, the Company will pay or provide to you:

a. Salary Continuation . The Company will pay you an amount equal to two times the sum of your annual Base Salary ($325,000) and your Annual Incentive Plan (“AIP”) bonus opportunity at your 2008 target rate ($162,500) as salary continuation which will be paid over 24 months following the Termination Date. Payments of this salary continuation amount of $975,000 will be paid in equal installments at the times and in the manner consistent with Company payroll practices for executive employees, and each installment payment shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code; provided, however, that notwithstanding the foregoing, installments (beginning with the first installment to be made and continuing with subsequent installments in order of time) with an aggregate value of $550,000 shall be paid in a lump sum on or before December 31, 2008 and the remaining aggregate installments ($425,000) shall continue to be paid at the times they would have been paid had such lump sum payment not been made. Payments made on or before June 30, 2009 will have the current U.S. hypothetical tax rate deducted. Payments made after June 30, 2009 will have all federal taxes deducted, as applicable; provided, however, if you return to the U.S. after June 30, 2009, any state and local taxes may also be deducted.

b. Health Benefits . The medical, dental and vision coverage you elected under the JohnsonDiversey Choice Benefits Program will cease on your Termination Date. At your option, you may continue your coverage for a period of 24 months, inclusive of 18 months of COBRA. Please contact the JDI Service Center at (866) 391-0760 for more detailed information. If you elect any such continued coverage, the Company will subsidize the medical, vision and dental rates for the 24 months of continuation coverage following your Termination Date so that for the same coverage you will pay the same amount of contribution as if you were an active employee; provided, however, that following the end of your 18 months of COBRA continuation coverage and continuing through the end of the 24 month period, with respect to any such medical, dental and vision benefits provided under a self-insured medical reimbursement plan (within the meaning of Section 105(h) of the Internal Revenue Code), (a “Self-Insured Medical Plan”), for which you have elected coverage, the reimbursement of an eligible medical expense must be made on or before the last day of the calendar year following the calendar year in which the expense was

 

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incurred and (B) you must pay to the Company the cost, on an after-tax basis, for the premium payments (both the employee and employer portion) required for such continued coverage under any Self-Insured Medical Plan. On or about January 31, 2012, the Company will make a payment in cash to you equal , on an after-tax basis, to (i) the amount, if any, you paid in premium payments during the immediately preceding calendar year for such continued coverage under any Self-Insured Medical Plan for the period following the end of the 18-months of COBRA continuation coverage through the end of the 24-month period, exceeds (ii) the amount you would have paid if you had remained in employment during such period.

c. Choice Benefits . As with the health benefits, the coverage you elected will cease on your Termination Date.

d. (i) 2008 AIP . You will receive a 2008 AIP bonus payment at your 2008 target rate ($162,500). This payment will be made after the end of 2008 at the time the Company pays 2008 awards under the terms of the AIP but in no event will the payment be payable later than March 15, 2009 and will be subject to the current U.S. hypothetical tax deductions.

(ii) 2006-2008 Cash LTIP . You will receive Cash LTIP payment for the 2006-2008 performance cycle based on actual performance. This payment will be made after the end of the 2006-08 performance cycle at the time the Company pays awards under the terms of the LTIP for the 2006-08 performance cycle to other participants and will be subject to all federal, state, and local taxes, as applicable.

e. 2007-09 Cash LTIP . You will receive a prorated Cash LTIP payment for the 2007-09 performance cycle based on actual performance, with your prorated entitlement to be determined by multiplying the otherwise earned benefit by a fraction, the numerator of which is the number of complete months during the performance cycle to your Termination Date and the denominator of which is 36. This payment will be made after the end of the 2007-09 performance cycle at the time the Company pays awards under the terms of the LTIP for the 2007-09 performance cycle to other participants and will be subject to all federal, state, and local taxes, as applicable.

f. 2008-10 Cash LTIP . You will receive a prorated Cash LTIP payment for the 2008-10 performance cycle based on actual performance, with your prorated entitlement to be determined by multiplying the otherwise earned benefit by a fraction, the numerator of which is the number of complete months during the performance cycle to your Termination Date and the denominator is 36. This payment will be made after the end of the 2008-10 performance cycle at the time the Company pays awards under the terms of the LTIP for the 2008-10 performance cycle to other participants and will be subject to all federal, state, and local taxes, as applicable.

g. JohnsonDiversey Retirement Plan/Non-qualified Retirement Plan . Your vested benefits under these plans at your Termination Date will be available to you pursuant to their terms. You will receive more detailed information within two weeks of your Termination Date.

 

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h. 401(k) Plan . You will continue to participate in the 401(k) Plan based on your base salary up to your Termination Date. Your Plan account will be based on the date of distribution of your account to you. To access your 401(k) account, please call Fidelity at (800) 890-4015.

i. Relocation/Expatriate Assignment Provisions . You will be entitled to a relocation benefit to relocate back to the U.S. according to the terms of the Company’s relocation policy as in effect as of the Effective Date (to be exercised on or before June 30, 2009); provided, however, that the expenses to be reimbursed must be incurred prior to the end of 2010, and provided further, that the Company shall pay all reimbursement for such expenses so incurred by the end of 2011. In addition, the Company will continue to provide you a housing and education allowance thru June 30, 2009 pursuant to the terms of your Expatriate Assignment Letter between us dated September 23, 2005 (the “Expatriate Assignment Letter”) as detailed in Exhibit “B” attached hereto.

j. Flexible Spending Account/Car Allowance . You will be entitled to reimbursement of expenses from your Flexible Spending Account for 2008 and 2009. Payment will be made within 90 days following the date you submit evidence that you incurred eligible expenses, and in all events prior to the last day of the calendar year following the calendar year in which you incur the expense. In no event will the amount of such expenses paid in one year affect the amount of expenses eligible for payment, or in-kind benefits to be provided, in any other taxable year.

k. Outplacement Assistance/All Other Benefits . You will receive a senior executive level outplacement program by an outplacement firm selected by you and paid for by the Company up to $30,000, provided that such payment shall be completed not later than June 30, 2009. All other benefits not specifically mentioned above cease as of your Termination Date, and you will not be entitled to any awards under our annual or long-term bonus or incentive plans (including performance bonus objective, AIP, and Cash/Equity LTIP incentive awards) for 2009 or later years. You will be paid for unused 2008 vacation days in accordance with Company policy and the requirements of Wisconsin law.

l. Release . Payment of the Cash LTIP payments described in Section 3.e and 3.f, and the relocation payment described in 3.i are conditioned upon your executing and delivering to the Company within 21 days after the Termination Date and not revoking a Release of Claims Agreement in the form attached as Exhibit “A”. If you do not execute the Release of Claims Agreement and deliver it to the Company within such period or if you execute and deliver the Release of Claims Agreement to the Company but revoke it before it becomes effective as provided therein, you will not be entitled to the payments referenced above in this Section 3.l and the aforementioned provisions of this Section 3 of the Agreement providing for such payments will be null and void and without effect.

 

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4. Corporate Credit Card . You agree to file all expense reports on your Mastercard Corporate Credit Card on or before your Termination Date. If any amount remains outstanding, you agree that the Company will withhold said amount from any monies due you under this Agreement that are not subject to Section 409A of the Internal Revenue Code or will otherwise promptly reimburse the Company on request.

5. Return of Company Property . Not later than the date of termination of the separate consulting services agreement between you and the Company, you shall return all Company-owned property in your possession, including but not limited to all keys to buildings or property, credit cards, files, equipment, software and computers, documents and papers (including but not limited to reports, Rolodexes, sales data, product lists, business plans, financial information, corporate governance materials, notebook entries, and files), telephone cards, cellular telephone(s), and all other Company property in accordance with Company guidelines and the Non-Compete (as defined below in Section 6).

6. Non-Compete . As a material term of this Agreement, you agree to comply in all respects with the terms of the Non-Competition Agreement with the Company, (ii) the Trade Secret, Invention, and Copyright Agreement with the Company and (iii) the Confidentiality Agreement with the Company (collectively, the “Non-Compete”), in


 
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