Confidential Employment Separation Agreement and Release
This
Confidential Employment Separation Agreement and Release (the “Agreement") is
between ▇▇▇▇▇ ▇. ▇▇▇▇ (“Executive”), on the one hand, and Fushi Copperweld, Inc.
(“Fushi” or the “Company”), on the other hand.
WHEREAS,
Executive is currently employed as Executive Vice President and Corporate
Controller of Fushi and serves on the Boards of Directors of certain entities
affiliated with the Company pursuant to an employment agreement between
Executive and Fushi;
WHEREAS,
Executive has provided notice to Fushi of his intent to voluntarily resign his
employment with Fushi;
WHEREAS,
as a result of Executive’s decision, Executive will resign from his employment
with Fushi and his seats on the Boards of Directors of entities affiliated with
the Company effective February 11, 2009 (the “Separation Date”),
and;
WHEREAS,
both Fushi and Executive desire to enter into this Agreement to finally resolve
all questions of compensation, entitlement to benefits, and any and all other
claims, whether known or unknown, which Executive could potentially have
relating to Executive’s employment with and separation from his employment with
Fushi. In exchange for Fushi providing these benefits to which
Executive is not otherwise entitled, Executive agrees to waive and settle any
and all potential legal claims and rights relating to Executive’s employment
with and separation from Fushi.
NOW,
THEREFORE, in consideration of the mutual promises set forth below, and
intending to be legally bound, Fushi and Executive agree as
follows:
1. Current Employment
Agreement. The Parties acknowledge and agree that they are
parties to an employment agreement titled Executive Employment Agreement for
▇▇▇▇▇ ▇. ▇▇▇▇ dated October 29, 2007 (the “Employment
Agreement”). The Parties further acknowledge and agree that the
Employment Agreement superceded and cancelled an earlier employment agreement
between Executive and Copperweld Bimetallics, LLC dated January 1,
2007. Finally, the Parties acknowledge and agree that the Employment
Agreement is the only employment agreement in effect between
them. The Parties agree that, except for Executive’s
post-employment covenants and obligations in the Employment Agreement, which
shall continue in full force, this Agreement shall cancel and supercede the
Employment Agreement and that such Employment Agreement, except for Executive’s
post-employment covenants and obligations contained in sections 14, 15, 16 and
17, shall have no further effect or force.
2. Separation of
Employment. Executive acknowledges that he has provided notice
to Fushi of his intent to resign his employment with the Company effective
February 11, 2009. Employee acknowledges and agrees that his decision
to resign his employment was not due to any request or requirement, express or
implied, by Fushi. Fushi is providing the compensation and benefits
providing in this Agreement to settle any claims and/or bona fide disputes
Executive may have and in exchange for Executive’s releases and covenants herein
as well as Executive’s good will.
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3. Resignation from Boards of
Directors. As part of Executive’s resignation of employment
from Fushi, effective February 11, 2009, Executive shall resign his seats on the
Boards of Directors for any entity affiliated with Fushi, including: Copperweld
Bimetallics, LLC; and Copperweld Bimetallics UK Ltd. In order to
effect such resignations for the relevant Boards of Directors, Executive shall
timely submit written notices of such resignations in a format requested by the
applicable entities.
4. Severance
Payment. As consideration for Executive’s releases and
covenants herein, Fushi agrees to pay Executive severance pay in the gross
amount of Ninety Two Thousand Five Hundred Dollars and Eight Cents ($92,500.08),
subject to applicable withholdings and deductions
(“Severance”). Executive and Fushi agree and acknowledge that this
amount is equal to six (6) months of pay at Executive’s final
salary. Fushi shall pay the Severance in twelve (12) equal
semi-monthly installments of Seven Thousand Seven Hundred and Eight Dollars and
Thirty Four Cents ($7,708.34), subject to applicable withholdings and
deductions. Accordingly, the Severance installment payments shall
take place over six (6) months (the “Severance Period”). No payment
shall be owed or due under this Agreement until the expiration of the revocation
period set forth herein and only if this Agreement has been executed and not
revoked. Fushi shall issue the first installment payment within
fifteen (15) business days of the expiration of the revocation
period.
5. Insurance and Benefits
Participation.
(a) By
virtue of his resignation, Executive acknowledges that his coverage under
Fushi’s group health and dental insurance plan or any other group health and
dental insurance plan offered by any entity affiliated with Fushi in which
Executive participates ends effective February 28, 2009. Thereafter,
he is entitled to continue his coverage and any dependent insurance coverage for
up to 18 months, under the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”). If Executive elects to continue such coverage under
the applicable health and dental insurance plan, the effective date of the
beginning of such continuation coverage is March 1, 2009.
(b) If
Executive elects to continue health and dental insurance coverage under the
Company’s plan, Fushi agrees to pay for such insurance coverage premiums for
Executive at the same level it pays for active employees for a period of six (6)
months from the date of his termination, or effective through August 31, 2009,
and during this time period, Executive will be responsible only for payment of
his Executive share of premiums charged by Fushi to active
employees. This premium amount will be deducted from Executive’s
severance payments. This amount may change each Plan year depending
on the premium charged to active employees.
(c) After
that 6-month period, effective September 1, 2009, Executive may continue his
coverage through the date of the 18-month maximum coverage, or through August
31, 2010, but during that time period, Executive will be personally responsible
for full coverage of premium payments -- up to 102% of the total cost of
premiums incurred by Fushi for medical and dental insurance
coverage.
(d) Per
the terms of COBRA, continuation coverage will be terminated before the end of
the maximum period if any required premium is not paid on time, if a qualified
beneficiary becomes covered under another group health plan that does not impose
any pre-existing condition exclusion for a pre-existing condition of the
qualified beneficiary, if a covered Executive enrolls in Medicare, or if the
employer ceases to provide any group health plan for its
employees. Continuation coverage may also be terminated for any
reason the Plan would terminate coverage of a participant or beneficiary not
receiving continuation coverage (such as fraud).
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(e) Fushi
agrees to pay coverage premiums for Basic Life Insurance and Basic AD&D
Insurance for Executive at the same level of coverage prior to termination for a
period of six (6) months from the date of his termination or effective through
August 31, 2009. Coverage will be terminated before the end of the
maximum period if Executive becomes insured under another employer’s plan. After
that 6-month period, effective September 1, 2009, Executive may elect to
continue such coverage only if and pursuant to any conversion benefits otherwise
available.
(f)
Executive will be compensated for 2009 Vacation in the gross amount of Ten
Thousand Six Hundred Seventy Three Dollars and Eight Cents ($10,673.08), less
withholdings required by law. Payment will encompass three (3) weeks
vacation pay accrued up through the effective date of termination from
employment, and no further vacation pay will be due to him under this Agreement
or otherwise. Payment will be made on the employee’s Separation
Date.
6. Stock
Options.
(a) The
Company hereby acknowledges that you are the holder of non-qualified options to
purchase 135,000 shares of common stock of the Company, of which options for
84,375 shares have vested and options for [50,625] shares have not
vested. Provided that you do not revoke this Agreement pursuant to
Paragraph 8 below, the unvested options for 50,625 shares shall be deemed to
have immediately vested as of the Separation Date. In addition, the
Company and Executive acknowledge that, on January 23, 2009, the Company granted
Executive an additional 40,000 non-qualified options pursuant to a Non-Qualified
Stock Option Agreement dated April 15, 2008 (“January 23, 2009
Grant”). The Company and Executive further acknowledge that none of
the options granted pursuant to the January 23, 2009 Grant are currently
vested. However, as additional consideration for this Agreement, the
Company shall deem 10,000 of the options granted pursuant to the January 23,
2009 Grant to have immediately vested as of the Separation Date.
(b) Any and
all such options held by you may be exercised by you on a “Cashless” basis (as
defined below) until their expiration date. For the purposes of this
Agreement, a “Cashless Exercise” shall mean an exercise pursuant to the
following provisions which shall be added as an amendment to each vested option
held by you:
Cashless
Exercise. In lieu of exercising this Option for cash, Optionee
may elect to receive, without the payment by the Optionee of any additional
consideration, Common Stock equal to the value of this Option (or the portion
thereof being canceled) by surrender of this Option at the principal office of
the Corporation together with the Notice of Exercise attached hereto indicating
such election, in which event the Corporation shall issue to the Holder hereof a
number of shares of Common Stock computed using the following
formula:
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Y (A -
B)
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X=
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A
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Where:
X = The number of
shares of Common Stock to be issued to the Optionee pursuant to this cashless
exercise.
Y= The number of shares of
Common Stock in respect of which the net issue election is made.
A= The
last trade price as reported by Bloomberg, LLP of one share of Common Stock on
the trading day the date the net issue election is made.
B= The Exercise Price (as
adjusted to the date of the cashless exercise).
7. Section
409A. The Parties acknowledge and agree that the
Severance and other benefits provided in this Agreement are provided as a
settlement of any potential claims Executive may have. In addition,
Executive releases Fushi from any obligations or responsibilities arising from
or relating to Paragraph 26 of the Employment Agreement. Executive
further acknowledges and agrees that Fushi has not made any representation
regarding the applicable tax treatment of any compensation or benefits provided
herein and that Executive should consult with his tax advisor for any possible
tax implication or treatment of such compensation and
benefits. Executive further acknowledges and agrees that Executive is
solely responsible for any taxes, penalties, or fines he may owe as a result of
any payments or benefits provided under this Agreement.
8. Post-Employment
Covenants. Executive specifically agrees to be bound and
abide by all post-employment covenants set forth in his Employment Agreement
including, but not limited to, the covenants set forth in Paragraphs 14, 15, 16,
and 17 of the Employment Agreement. Executive represents that
he has reviewed such covenants, including the non-competition covenant and that
he will fully comply with such provisions. Such provisions are
specifically incorporated into this Agreement for reference and enforcement
purposes.
9. Release. Executive
hereby releases Fushi (Fushi Copperweld, Inc.), Copperweld Bimetallics, LLC,
Copperweld Bimetallics Holdings, LLC, Copperweld International Holdings, LLC,
Copperweld Bimetallics UK, Ltd., International Manufacturing Equipment
Suppliers, LLC, and any other entity affiliated with Fushi as well as their
respective subsidiaries, predecessors, successors, affiliates, and assigns, and
the shareholders, directors, officers, employees, and agents of the foregoing
(hereinafter also referred to collectively as "the Released Parties"), from any
and all rights and claims that arose prior to Executive's signing of this
Agreement and that involve or in any way relate to Executive’s employment with
Fushi or the termination of that employment, but excluding any claims relating
to stock options discussed in paragraph 6 above. The rights and
claims that Executive hereby releases include, but are not limited to, any and
all rights and claims arising under Title VII of the Civil Rights Act of 1964
(Title VII), the Americans with Disabilities Act (ADA), the Age Discrimination
in Employment Act (ADEA), the Family and Medical Leave Act (FMLA), the Worker
Adjustment and Retraining Notification Act (WARN), the Uniformed Services
Employment and Reemployment Rights Act (USERRA), the Employee Retirement Income
Security Act (ERISA) (except claims for vested benefits), the Fair Labor
Standards Act (FLSA), and any other federal, state, or local law or regulation,
and any and all claims for wrongful or unjust discharge or breach of contract or
promise, express or implied.
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10. Covenant Not to ▇▇▇
Executive promises never to file a lawsuit or request arbitration concerning,
and promises not to otherwise assert, any claims that are released in this
Agreement. This release shall not constitute a release of any claims
for breach of this Agreement, nor shall it bar a lawsuit by Executive to enforce
the terms of this Agreement or any stock option discussed in paragraph 6
above. Executive does not give up the right to file a Charge of
Discrimination with the Equal Employment Opportunity Commission, but Executive
expressly waives and releases any right to obtain monetary relief relating to
such a charge or subsequent lawsuit filed by the Equal Employment Opportunity
Commission.
a. In the event that
Executive brings an action against the Released Parties based on any other claim
released in this Agreement, the Released Parties may, at their option, and as
applicable (a) stop making payments that would otherwise have been due under
this Agreement; (b) demand the return of any payments that have been made under
this Agreement; (c) plead this Agreement in bar to any such action; (d) seek any
and all remedies available, including but not limited to injunctive relief and
monetary damages, costs and reasonable attorneys’ fees.
b. In the
event that the Released Parties breach this Agreement, Executive will be
entitled to bring an action for breach of this Agreement but not for any claims
released in this Agreement. In the event that the Released Parties
prevail in such an action, they will be entitled to recover (as appropriate and
applicable) monetary damages, injunctive relief, costs and reasonable attorneys’
fees.
11. Confidentiality. Executive
shall keep the details of this Agreement in strict confidence, and shall not
reveal details of the Agreement to anyone except members of the Executive’s
immediate family, the Executive’s attorney, and Executive’s tax
advisor. Executive further agrees and understands that he is
responsible for ensuring that these individuals also maintain the
confidentiality of this Agreement and the Confidential Employment Termination
Letter.
12. Notification of
Subpoena/Court Order. Executive agrees that Executive will not
voluntarily assist a party opposing the Released Parties in any present,
potential, or future legal proceedings by or against the Released
Parties. Executive agrees that he will provide information to a party
opposing the Released Parties in any present, potential, or future legal
proceedings by or against the Released Parties, only pursuant to and to the
extent required by subpoena or order of court. Executive further
agrees that, if Executive is served with any subpoena or order of court relating
in any way to the business of Fushi, Executive will immediately notify Fushi of
his receipt of that subpoena or order and will provide Fushi with a copy of such
subpoena or order of court.
13. Nondisparagement. Executive
agrees not to directly or indirectly disparage the Released Parties, or their
products or services, or engage in any communications which could cause injury
to or harm the business or reputations of the Released Parties.
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14. Fushi
Property. Executive acknowledges that the information,
observations, data, and knowledge about business matters involving Fushi or the
other Released Parties which Executive obtained during the course of his
employment with Fushi, and which are not generally known to the public,
constitute confidential, proprietary, and trade secret information of Fushi’s
and/or the other Released Parties’. This information includes, but is
not limited to, corporate information, including contractual arrangements,
plans, locations, strategies, tactics, potential acquisitions or business
combinations, or joint venture possibilities, policies, and negotiations;
marketing information, including sales, purchasing, and inventory plans,
strategies, tactics, methods, customers, advertising, promotion or market
research data; financial information, including operating results and
statistics, cost and performance data, projections, forecasts, investors, and
holdings; and operational information, including trade secrets, secret formulas,
control and inspection practices, accounting systems and controls, computer
programs and data, personnel lists, resumes, personal data, organizational
structure, and performance evaluations. Executive further
acknowledges that the disclosure or use of all or any of Fushi's or any of the
other Released Parties’ confidential, proprietary, or trade secret information
by any party other than Fushi and/or other Released Party would have an
immediate, material, and adverse effect on Fushi and/or the other Released
Parties. Executive further acknowledges that Executive is obligated under
statutory and common law not to use or disclose, without Fushi’s prior written
consent, any confidential, proprietary, or trade secret information of Fushi’s
or any of the other Released Parties. Executive agrees that he will
abide by his statutory and common law obligations not to use or disclose
Fushi’s or any of the other Released Parties’ confidential,
proprietary, or trade secret information and further agrees not to otherwise
take any action that is injurious to Fushi or any of the other Released
Parties.
15. No Admission of
Wrongdoing. Fushi believes that, in its employment of
Executive, Fushi and the other Released Parties have acted lawfully and
consistent with the Employment Agreement. Executive expressly agrees
that by offering this Agreement or by entering into this Agreement, Fushi and
the other Released Parties in no way admit that the Company or any of the other
Released Parties have acted unlawfully, breached the Employment Agreement or
otherwise treated Executive in any way unlawfully, discriminatorily, wrongly, or
unfairly.
16. Review by Legal
Counsel. Fushi hereby advises Executive to consult with an
attorney about the requirements of this Agreement and the Agreement’s release
before signing this Agreement.
17. Consideration
Period. Executive hereby acknowledges that he received this
Agreement on February 16, 2009. Executive shall have a period of
twenty-one (21) days
after Executive’s receipt of the Agreement, within which to review, consider,
and sign the Agreement. If Executive wishes to enter into this
Agreement, Executive must sign the Agreement, have Executive’s signature
witnessed, and return the Agreement to ▇▇▇▇▇ ▇▇▇▇, at the
offices of Copperweld Bimetallics, LLC, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, no later than 5:00 p.m. on March
9, 2009. If
Executive fails to return the signed and witnessed Agreement to Copperweld by
5:00 p.m. on March 9, 2009, the offer of separation benefits set forth in this
Agreement shall be null and void.
18. Revocation
Period. Executive shall have a period of seven (7) days following
Executive’s signing of this Agreement, within which to change his mind and
revoke the Agreement. If Executive wishes to revoke the Agreement
after signing the Agreement, Executive must provide written notice of that
revocation to ▇▇▇▇▇
▇▇▇▇ (address above) no later than the eighth (8) day after signing the
Agreement (the “Effective Date”). This Agreement shall become
effective and enforceable after the expiration of seven days after Executive has
signed the Agreement, provided that Executive has not revoked the Agreement
during that seven-day period.
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19. Executive
hereby represents that he has had an opportunity to review and discuss the terms
and meaning of this Agreement with Executive’s legal counsel, that Executive
understands the terms and meaning of the Agreement, and that Executive is
entering into the Agreement freely and voluntarily.
20. Miscellaneous.
(a) If any
provision of this Agreement or any application of this Agreement is held to be
invalid by a court of competent jurisdiction, the invalidity of that provision
or application shall not affect the validity or enforceability of any other
provision or application of this Agreement.
(b) This
Agreement shall be governed by, and shall be interpreted in accordance with, the
internal law, and not the law of conflicts, of Tennessee.
(c) Executive
acknowledges and agrees that the remedy at law available to Fushi for breach by
Executive of any of Executive’s obligations under this Agreement and the
post-employment covenants in the Employment Agreement would be inadequate and
that damages flowing from such a breach would not readily be susceptible to
being measured in monetary terms. Accordingly, Executive
acknowledges, consents and agrees that, in addition to any other rights or
remedies which Fushi may have at law, in equity or under this Agreement, upon
adequate proof of Executive’s violation of such provisions, Fushi shall be
entitled to immediate injunctive relief and may obtain a temporary order
restraining any threatened or further breach without the necessity of proof of
actual damages.
(d) The
headings and captions of this Agreement are provided for convenience only and
are intended to have no effect in construing or interpreting this
Agreement. The term “including” is used in this Agreement to list
items by way of example and shall not be deemed to constitute a limitation of
any term or provision contained herein.
(e) This
Agreement may be executed in two or more separate counterparts, each of which
shall be deemed an original and all of which shall be part of the same
Agreement. Furthermore, facsimile reproductions of original
signatures shall be deemed binding for purpose of enforcement and execution of
this Agreement.
(f) This
Agreement shall be binding upon and enure to the benefit of the Parties hereto
and the Released Parties and the respective heirs, executors, administrators,
personal representatives, successors, and assigns of the Parties and Released
Parties.
(g) The
Parties agree that any rule of construction by which terms of an agreement are
construed against the drafter of the agreement shall not apply to any
interpretation of this Agreement.
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(h) This
Agreement represents the entire agreement between Executive and
Fushi. The Released Parties have made no written or oral
representations or promises to, or agreements with, Executive other than the
promises and agreements of Fushi that are set forth in this
Agreement.
[Remainder
of Page Intentionally Left Blank; Signature Page Follows]
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IN
WITNESS WHEREOF, and intending to be legally bound, the parties have executed
this Confidential Employment Separation Agreement and Release on the dates
indicated below.
| ▇▇▇▇▇ ▇. ▇▇▇▇ | ▇▇▇▇▇ COPPERWELD, INC. | |||
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/s/
▇▇▇▇▇ ▇. ▇▇▇▇
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/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
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Executive’s
Signature
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Name
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s/
▇▇▇▇▇▇ ▇. Vanug
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President
and CFO
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Witness
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Title
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February
17, 2009
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March
3, 2009
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Date
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Date
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Provided
to Employee on February 16,
2009.
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