Exhibit 10.23
SEPARATION AGREEMENT
BETWEEN
WOLVERINE TUBE, INC. AND JOHANN
R. MANNING, JR.
This Separation Agreement (this
“Agreement”) between Wolverine Tube, Inc.
(“Wolverine”) and Johann R. Manning, Jr.
(“Manning”) controls the terms of the severance of the
relationship between the two parties and their respective rights
and obligations to each other. This Agreement is executed on the
dates shown by the signatures below, but shall be effective on the
effective date of the Investment, as defined below (the
“Effective Date”), and only if the Investment occurs on
or before February 28, 2007.
Recitals
WHEREAS, Plainfield Special
Situations Master Fund Limited (“Plainfield”) and The
Alpine Group, Inc. (“Alpine”) have agreed to make an
investment in Wolverine in which Plainfield and Alpine, as a group,
would beneficially own in excess of 15% of the voting power of the
stock of Wolverine (the “Investment”); and
WHEREAS, in connection with and
contingent upon the closing of the Investment, Manning and
Wolverine wish to sever the employee-employer relationship between
the two parties on amicable terms and in a manner beneficial to and
respectful to the desires of both parties; and
WHEREAS, Manning and Wolverine
previously have entered into a 2002 Change in Control, Severance
and Non-Competition Agreement, effective as of July 12, 2002,
as amended (the “2002 Change in Control Agreement”);
and
WHEREAS, the Investment will
constitute a Change in Control of Wolverine for purposes of the
2002 Change in Control Agreement; and
WHEREAS, in order to avoid any
dispute that could arise under the 2002 Change in Control Agreement
in connection with the Investment and the transactions contemplated
thereby, the parties have agreed to replace and supersede certain
provisions of the 2002 Change in Control Agreement, contingent upon
closing of the Investment; and
WHEREAS, on or about the date of the
closing of the Investment, Manning shall enter into a Consulting
Agreement with Wolverine to provide consulting services for fifteen
(15) months (the “Consulting
Agreement”);
NOW, THEREFORE, in consideration of
the recitals and mutual covenants and agreements set forth below,
the parties, each intending to be legally bound, agree as
follows:
1. Resignation of Employment
. Manning hereby voluntarily resigns his employment with Wolverine
and all its subsidiaries effective immediately following the
closing of the Investment (the “Resignation Date”). If
for any reason the Investment does not occur by February 28,
2007, this Agreement shall be null and void, Manning’s
resignation shall be deemed not to have been tendered, and the 2002
Change in Control Agreement shall continue in full force as in
effect on the date immediately prior to the execution of this
Agreement.
2. Compensation, Benefits, and
Other Consideration . The parties agree that, immediately upon
the closing of the Investment, and subject to Section 5 of
this Agreement, Section 1 of the 2002 Change in Control
Agreement (entitled “Termination of Employment”) shall
be superseded and will have no further force or effect, and the
parties will have no further rights and/or obligations thereunder.
In exchange for the Release provided to Wolverine by Manning as
referenced in Section 8 of this Agreement, Wolverine hereby
agrees to provide Manning with consideration consisting of the
following:
(a) All stock options, restricted
stock and other equity awards granted by Wolverine and held by
Manning as of the Resignation Date, to the extent not already
vested by their terms, shall become immediately vested and
exercisable as of the Resignation Date. The value, if any,
attributable to the acceleration of vesting of such equity awards
that constitutes a parachute payment to Manning under Sections 280G
or 4999 of the Internal Revenue Code of 1986, as amended
(“Code”), as determined under Section 3 of this
Agreement is referred to herein as the “Equity Parachute
Value.”
(b) On or before the Resignation
Date, Wolverine shall deposit into a rabbi trust for the benefit of
Manning, a lump sum cash severance payment (the “Severance
Payment”) equal to (i) $1,472,500, minus (ii) the
Equity Parachute Value. Provided that Manning shall have signed the
Release attached hereto as Appendix A and not revoked such Release
during the seven-day revocation period, the Severance Payment shall
be paid to Manning out of the rabbi trust on the day following the
six (6) month anniversary of the Resignation Date.
(c) For a period of three
(3) years after the Resignation Date, Wolverine shall make
available to Manning medical and disability benefits substantially
similar to those that Manning was receiving or entitled to receive
immediately prior to the Resignation Date, and no less favorable
than those in which the senior executive management team of
Wolverine shall be eligible to participate during such period, and
if Manning shall choose to participate in such benefit programs, he
shall pay the full “phantom cost” (i.e., the employee
and employer portion of the costs) of his participation in such
programs as determined by Wolverine’s employee benefits firm
for the period of his participation. Beginning at the end of such
three-year period, Manning shall have rights to continue medical
insurance coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”).
(d) For a period of six
(6) years after the Resignation Date, Manning shall be
entitled to director and officer insurance coverage for his acts
and omissions while serving as an officer and director of Wolverine
on a basis no less favorable to him than the coverage provided over
such six-year period to the then-current officers and directors of
Wolverine.
(e) Wolverine shall continue to
satisfy in full any currently existing or hereafter arising
indemnification obligations to Manning (whether arising by law,
Wolverine’s bylaws or pursuant to any separate
indemnification agreement between Wolverine and
Manning).
(f) Wolverine shall honor and pay
any and all bonus and success share monies achieved on account of
2006 performance of Wolverine to Manning that have not already been
paid, consistent with and at the same time as amounts are awarded
to other participants of these programs, up to a maximum of
$55,000.
2
Nothing in this Agreement affects
any vested rights Manning has in any retirement, welfare or benefit
plans, programs or policies of Wolverine as of the Resignation
Date.
Manning agrees and acknowledges that
the aggregate amount of cash payable pursuant to this Agreement and
the Consulting Agreement shall not exceed $3,085,000 (the
“Aggregate Amount”). The Aggregate Amount does not
apply to (i) vested rights Manning has in any retirement,
welfare or benefit plan, (ii) director and officer insurance
coverage (or amounts payable thereunder),
(iii) Wolverine’s indemnification obligations,
(iv) legal fees or (v) reimbursement of travel-related
expenses incurred at Wolverine’s request, in each case to the
extent such amounts or rights are provided for in the Separation
Agreement or the Consulting Agreement. Notwithstanding the
foregoing, the Aggregate Amount shall not apply if the provisions
of the 2002 Change of Control Agreement are reinstated in
accordance with Section 5 of this Agreement.
3. Golden Parachute
Considerations .
(a) In the event it shall be
determined (as hereafter provided) that any Payments and/or
benefits would be subject to the excise tax imposed by
Section 4999 of Code or to any similar tax imposed by federal,
state or local law, or any other revenue system to which Manning
may be subject,
