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Separation And General Release Agreement

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SEPARATION AND GENERAL RELEASE AGREEMENT


This Separation and General Release Agreement (the "Agreement") is made by and between GAF Materials Corporation ("GAFMC", as more fully defined in Paragraph 17 of this Agreement), and William C. Lang ("Lang"), sometimes herein collectively referred to as "the Parties".


WITNESSETH:


WHEREAS, Lang has been employed on an at-will basis by GAFMC or its predecessors or subsidiaries and consistent with its March 20, 1997 letter to Lang attached hereto as Attachment B; and


WHEREAS, most recently, Lang has served as Executive Vice President, Chief Administrative Officer, and Chief Financial Officer of GAFMC and was located in Wayne, New Jersey; and


WHEREAS, GAFMC has decided to terminate Lang's at-will employment; and


WHEREAS, Lang and GAFMC desire that Lang's termination of employment be on mutually acceptable and amicable terms; and


WHEREAS, Lang has been advised of his right to consult an attorney before signing this Agreement.


NOW, THEREFORE, in consideration of the covenants herein undertaken, and the releases herein contained including the general releases in Paragraph 6 of this Agreement, and for other good and valuable consideration, receipt of which is hereby acknowledged by the Parties, GAFMC and Lang agree as follows:


1. Lang's employment with GAFMC shall terminate effective the earlier of (x) the close of business May 31, 2001, or (y) the day before he commences employment with another employer (in either case referred to as the "Termination Date"). Lang agrees to execute any paperwork or procedures reasonably necessary to effectuate this termination. Effective immediately, Lang shall no longer hold any officer position of GAFMC, including Executive Vice President, Chief Administrative Officer, and Chief Financial Officer, and shall no longer serve on the Board of Directors of GAFMC. 2
(a) During the period January 22, 2001 through the Termination Date ("Transition Period"), Lang shall continue to perform his job duties with respect to specific matters and projects designated and authorized by the President and Chief Executive Officer and shall cooperate with and help GAFMC effectuate a smooth transition of his duties and projects to others as appropriate. Lang agrees that during the Transition Period, he shall at all times perform his duties and obligations conscientiously, loyally and to the best of his ability and shall at all times act in accordance with GAFMC's interests. Notwithstanding the foregoing, GAFMC recognizes and agrees that during the Transition Period, Lang may devote a substantial amount of time during working hours to his efforts to find other employment, and GAFMC shall not consider such activity to be a violation of his obligation to perform his job duties as provided by this Paragraph 1(a). Notwithstanding this Paragraph 1, GAFMC may, in its sole discretion, place Lang on paid leave of absence at any time, provided, however, that such action by GAFMC shall not relieve GAFMC of its obligations under this Agreement.


2. GAFMC agrees to provide the following pay, benefits, and other consideration to Lang:


(a)For a period of nine months (9) months, beginning with GAFMC's next regular payroll period following the Termination Date and ending nine (9) months later (the "Severance Period"), GAFMC will pay Lang the total sum of $194,999.94 in eighteen (18) semi-monthly payments of $10,833.33 each, less standard withholding and payroll deductions, each of which represents an amount equal to Lang's semi-monthly base salary rate at the time of the Termination Date ("Severance Payments"). Should the Termination Date fall during the middle of a semi-monthly payroll cycle, GAFMC shall issue a check on a pro-rated basis for the period worked prior to the Termination Date, and the Severance Payments shall commence on the next regular payroll period following the Termination Date. Lang agrees that GAFMC's agreement to provide the foregoing Severance Payments fully satisfies GAFMC's understanding or agreement with Lang regarding severance pay as described in Paragraph 7 of GAFMC's March 20, 1997 letter to Lang.


(b)GAFMC shall pay Lang a lump sum payment of $10,833.34 on the eighth day following Lang's execution of this Agreement, provided he does not revoke or repudiate this Agreement pursuant to Paragraph 18. The foregoing


2 3 payment represents payment for unused vacation entitlement that Lang accrued as of February 15, 2001. Calculation of this payment is based on Lang's present base salary rate and is subject to standard withholding and payroll deductions. Lang agrees that he shall not accrue or be eligible for any vacation days after February 15, 2001.


(c) GAFMC agrees that notwithstanding his status during the Transition Period, GAFMC agrees that Lang may continue to use an office in Wayne, NJ and GAFMC agrees to provide him with reasonable secretarial assistance. To the extent practicable, such secretarial assistance shall be by his current secretary. Should GAFMC place Lang on paid leave absence during the Transition Period, it will provide him with office space elsewhere.


(d) During the Severance Period, GAFMC shall continue to provide Lang and his dependents, if any, group medical, dental, and life insurance benefits in the same amount which is presently being provided to them by GAFMC under the same terms as applicable to active employees of GAFMC, exclusive of long-term disability insurance. Upon expiration of the Severance Period, if Lang has not obtained other group health insurance coverage, he will be eligible to elect, at his expense, continuation of his group medical and/or dental insurance coverage provided by GAFMC as provided by the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). The Severance Period shall not be counted towards the applicable COBRA continuation coverage period. After the Termination Date, Lang shall no longer be eligible to participate in GAFMC's 401k plan, and his rights and obligations shall be governed solely by the applicable 401k Plan.


(e) GAFMC agrees to pay the reasonable costs of job outplacement services for a six (6) month period from a professional outplacement business selected by GAFMC to assist Lang in finding new employment. Lang's receipt of such outplacement assistance shall be subject to the terms and arrangements made by GAFMC with the outplacement business.


(f) GAFMC and Lang agree that any stock options currently held by Lang that have vested as of February 15, 2001 shall, in consideration for the payment set forth below, be cancelled, and Lang shall complete any paperwork and procedures necessary to effect such cancellation of vested options. Provided Lang complies with the foregoing, GAFMC shall pay Lang a lump sum


3 4 payment in the amount of $94,000.00, less standard withholding and deductions, which represents the value of all unexercised, vested stock options held by Lang. GAFMC shall make the foregoing payment to Lang on the eighth day following Lang's execution of this Agreement provided he has not revoked this Agreement pursuant to Paragraph 18 of this Agreement. Lang and GAFMC agree that other than as set forth in this Paragraph 2(f), neither GAFMC nor Lang shall have any other rights or obligations with respect to any stock options held by Lang and any stock option plan or option agreement between Lang and GAFMC shall be null and void.


(g) Lang shall not be entitled to any Executive Incentive Compensation ("EIC") bonus for the year 2000 or otherwise. In lieu of any EIC bonus, GAFMC agrees to pay Lang a lump sum of $75,000.00, subject to standard withholding and deductions on the eighth day following Lang's execution of this Agreement, provided he does not revoke or repudiate this Agreement pursuant to Paragraph 18 of this Agreement. Further, GAFMC agrees to pay Lang a lump sum payment in the amount of $75,000.00 on the eighth day following the the Termination Date, provided Lang executes the General Release Agreement attached as Attachment A hereto on the Termination Date and does not revoke or repudiate the General Release Agreement within the seven-day revocation a
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