Severance Agreement - American Greetings Corp. and Patricia L. Ripple
SEVERANCE AGREEMENT
This Severance Agreement ("Agreement") is entered into between Patricia
L. Ripple ("EMPLOYEE") and American Greetings Corporation, an Ohio corporation
("AG" or "Company"), on the date set forth at the signature lines below, arising
out of the employment relationship between EMPLOYEE and AG. This Agreement will
not become effective and irrevocably binding until seven (7) days after it is
signed by EMPLOYEE. EMPLOYEE may revoke this Agreement at any time prior to the
expiration of such seven (7) days. A revocation must be in writing and it must
be received by the Company by the close of business on the seventh day.
In consideration of the mutual covenants and agreements hereinafter set
forth, and intending to be legally bound, the parties agree as follows:
1. EMPLOYEE hereby acknowledges the elimination of her position as
Senior Vice President with responsibility for Retailer Logistics. EMPLOYEE also
acknowledges that she has been offered a position in another capacity. If
EMPLOYEE continues working for the Company up until August 30, 2002 (or any
other earlier date mutually agreed on by the EMPLOYEE and Company) , the Company
agrees to provide to EMPLOYEE the benefits as described below. These benefits
will be granted to EMPLOYEE as described if she voluntarily separates from the
Company on any date between September 1, 2002 and August 31, 2003, or if she is
involuntarily separated from the Company at any time after September 1, 2002. In
either case, EMPLOYEE's last day of work shall be the "Separation Date."
2. Upon her separation from the Company and with the signing of a
waiver on or about the Separation Date, prepared by the Company and identical to
paragraph 9 of this agreement, EMPLOYEE will receive the following benefits from
the Company:
a. Severance pay of an amount equal to 30 months base
salary, payable in monthly installments, less
applicable deductions. If the Separation Date is
before September 1, 2003, the severance pay will be
based on EMPLOYEE'S base salary in effect on either
June 27, 2002 or the Separation Date, whichever is
greater. If the Separation Date is on or after
September 1, 2003, the severance pay will be based on
EMPLOYEE's base salary in effect on the Separation
Date. Company reserves the right to pay any portion
of the severance pay in an undiscounted lump sum, at
Company's discretion;
b. EMPLOYEE shall be eligible to participate in the
Fiscal Year 2003 Annual Incentive Plan, as a Senior
Vice President in the North American Greeting Card
Division (NAGCD), with a Tier 3 or better performance
evaluation; if EMPLOYEE's Separation Date is prior to
February 28, 2003, and if the NAGCD business unit's
actual performance is 100% or less of the business
unit goal, EMPLOYEE shall be paid an incentive under
this Plan equal to what she would have been paid
under both the business unit and corporate components
of the Plan had she still been employed on February
28, 2003, and earning a base salary equal to her base
salary in effect on June 27, 2002; if the NAGCD
business unit's actual performance is greater than
100% of its business unit goal, EMPLOYEE's actual
incentive payment under this Plan will be the amount
that would normally be paid (both business unit and
corporate components) if the business unit had
achieved exactly 100% of its business unit goal, plus
a portion of the amount that would normally be paid
(both business unit and corporate components) for
achieving more than 100% of its goal; that portion
will be pro-rated based on the number of full months
EMPLOYEE has worked in Fiscal Year 2003; EMPLOYEE
will be deemed to have earned the base salary in
effect on June 27, 2002 up until February 28, 2003;
in all cases, payment (if any) under the corporate
component shall be based on actual corporate
performance;
c. If EMPLOYEE works into Fiscal Year 2004, and
voluntarily separates from the Company during FY
2004, the regular terms and conditions of the
Incentive Plan shall apply;
d. If EMPLOYEE works into Fiscal Year 2004, or any
subsequent fiscal year, and is involuntarily
separated during the fiscal year, she shall be paid
an annual incentive under the Plan (if any) in effect
for that fiscal year at the target annual percentage
for her job
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level, multiplied by the corporate multiplier
actually earned (if any), based on her base salary
actually earned in that fiscal year, up until the
Separation Date;
e. AG will pay for outplacement services for one year to
assist EMPLOYEE in seeking employment. AG will select
the service provider and will make direct payments to
the service provider;
f. EMPLOYEE will have continued use of EMPLOYEE's
company car for 90 days after the Separation Date, at
which time EMPLOYEE will return the car to AG unless
EMPLOYEE exercises the option to purchase the car at
a $500 incentive discount, and so notifies the
Company of this decision before the end of the 90
days.
g. EMPLOYEE will continue to be covered under the
Company's Executive Life Insurance Plan for 30 months
past the Separation Date.
3. For the purposes of vesting of stock options granted to EMPLOYEE by
Company prior to the Separation Date, EMPLOYEE shall be considered to be
actively employed by Company for 30 months past the Separation Date. EMPLOYEE
may exercise such options up until the original expiration date set forth in the
original grants.
4. If EMPLOYEE is re-employed by Company after Separation Date, in any
capacity other than a temporary or part-time assignment, prior to receipt of all
the severance benefits provided in paragraph 2., EMPLOYEE will forfeit any
unpaid severance benefits. In the event EMPLOYEE is paid severance in a lump
sum, s/he will pay back to COMPANY that amount EMPLOYEE would not have received
had severance been paid out in equal installments over time, pursuant to
paragraph 2(a).
5. EMPLOYEE acknowledges that as of the Separation Date EMPLOYEE will
cease to be an employee of AG and thereafter will not be eligible for or receive
any benefits of employment and that the only benefits EMPLOYEE will receive from
AG after the Separation Date are those benefits described in paragraphs 2 and 3
above; provided, however, that this Agreement does not waive any vested benefits
or any benefit the right to which was earned on or prior to the Separation Date
that EMPLOYEE may be eligible to receive under any stock option plan, the
Retirement Profit Sharing and Savings Plan or the Deferred Compensation Plan.
These benefits shall continue as provided under those plans, through the
Separation Date.
6. Notwithstanding any other provision of this Agreement, EMPLOYEE
acknowledges that the benefits EMPLOYEE will receive under paragraphs 2 and 3
above are greater than those benefits EMPLOYEE would have been entitled to
receive upon termination in the absence of this Agreement.
7. This Agreement is offered as part of an exit incentive or other
employment termination program (the "Program"). Information concerning
eligibility and selection for the Program that is required to be provided under
the federal age discrimination in employment laws is enclosed with this
Agreement. EMPLOYEE acknowledges receipt of the information.
8. It is agreed by EMPLOYEE that this Agreement, the benefits,
including all benefits set forth in paragraphs 2 and 3 above, and all other
terms of this Agreement, are each confidential information and shall not be
disclosed or revealed to any person other than EMPLOYEE's attorneys,
accountants, tax advisors, and immediate family members (who must be informed of
and agree to be bound by the terms of this paragraph), and any governmental
taxing authority.
9. With respect to any and all events arising out of or related to the
employment relationship between EMPLOYEE and the Company occurring on or before
the Separation Date, EMPLOYEE hereby releases and forever discharges AG, and
each of its agents, officers, directors, employees, subsidiaries, divisions,
affiliates,
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successors and assigns, (collectively "AG Releasees") from any and all claims
and/or causes of action, known or unknown, arising (i) from or during EMPLOYEE's
employment with AG or (ii) as a result of the termination of that employment;
and EMPLOYEE hereby covenants and agrees that he will not assert any such claims
and/or causes of action against any AG Releasee, including but not limited to,
(i) claims and/or causes of action arising under the Age Discrimination in
Employment Act (29 U.S.C. Sec. 621 et seq.), (ii) claims and/or causes of action
arising under federal, state or local laws, including but not limited to those
prohibiting employment discrimination on the basis of race, color, national
origin, religion, sex, age, disability or otherwise; (iii) claims and/or causes
of action growing out of any legal restrictions on AG's right to terminate its
employees, including breach of contract, discharge in violation of public
policy, or promissory estoppel, or (iv)tort claims and/or causes of action,
including infliction of emotional distress, defamation, libel or slander. This
release will not apply to any of the following: (i) coverage of the Employee as
an insured under any AG insurance with respect to third party liability claims;
(ii) rights to defense or indemnification with respect to third party claims
relating to the acts of Employee within the scope of his employment or as an
officer; (iii) right to reimbursement for business expenses incurred prior to
the Severance Date, and (iv) rights to unemployment compensation or workers
compensation.
10. EMPLOYEE represents and warrants that EMPLOYEE has no interest or
obligation that is inconsistent with or in conflict with this Agreement or that
would prevent, limit or impair Employee's performance of any part of this
Agreement.
11. EMPLOYEE agrees that in the event that EMPLOYEE materially breaches
any of the terms of this agreement, EMPLOYEE will forfeit the benefits described
in paragraphs 2 and 3, plus EMPLOYEE will pay any expenses or damages incurred
by the AG Releasees as a result of the breach, including reasonable attorneys'
fees. If AG breaches this agreement, AG will pay attorney's fees and expenses
incurred in enforcing this agreement.
12. EMPLOYEE acknowledges that EMPLOYEE has an obligation of confidence
and non-disclosure with respect to any and all confidential information and
trade secrets that EMPLOYEE acquired during the course of employment with
Company. This obligation of confidence and non-disclosure extends to both
Company information and third-party information held by the Company in
confidence, and this obligation continues after the Severance Date. EMPLOYEE is
prohibited from using or disclosing such information.
13. EMPLOYEE acknowledges that EMPLOYEE is bound by the non-compete
provisions in the Employment Agreement entered into between EMPLOYEE and
Company, which provide:
[EMPLOYEE] shall not for a period of twelve months after leaving
the employ of the Corporation or a subsidiary, regardless of the
reason for such leaving, enter into the employment, directly or
indirectly or in a consulting or free lance capacity, of any
person, firm or corporation in the United States or Canada, which
at such date of leaving the employ of the Corporation or a
subsidiary shall be manufacturing or selling products that are
substantially similar in nature to the products being then
manufactured or sold by the Corporation or the subsidiary.
14. (a) This Agreement constitutes the entire understanding between
EMPLOYEE and the Company relating to the subject matter contained herein and
this Agreement supersedes any previous agreement(s) that may have been made in
connection with EMPLOYEE's employment with AG except insofar as such
agreement(s) concern EMPLOYEE's obligations with regard to competing with AG or
EMPLOYEE's obligations with regard to AG's trade secrets, proprietary or other
confidential information belonging to AG, which obligations are not modified,
amended or terminated by this Agreement and which continue after the Separation
Date. This Agreement may not be changed, modified, or altered without the
express written consent of EMPLOYEE and a senior officer of AG.
(b) AG's failure to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver of, or deprive
AG of its right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. To be effective, any waiver must be in writing and
signed by an officer of AG.
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(c) This Agreement shall be construed in accordance with the laws
of the State of Ohio. If any part or section of this Agreement is found to be
contrary to law or unenforceable, the remainder shall remain in force and
effect.
15. EMPLOYEE is hereby advised and encouraged to consult an attorney
prior to executing this Agreement. EMPLOYEE acknowledges that if EMPLOYEE has
executed this Agreement without consulting an attorney EMPLOYEE has done so
knowingly, voluntarily and contrary to the express advice herein.
16. EMPLOYEE acknowledges that EMPLOYEE has been given at least
forty-five (45) days from the date EMPLOYEE first received this Agreement, which
date was on or before July 1, 2002, during which to consider this Agreement. If
EMPLOYEE does not execute this Agreement by September 1, 2002, the Company may
rescind this Agreement at any time unless the Company expressly notified
EMPLOYEE in writing otherwise.
17. EMPLOYEE and Company both agree that the execution of this document
does not represent an immediate separation in employment. EMPLOYEE agrees that
if she elects to terminate her employment prior to August 30, 2003, she will be
entitled to those benefits set forth in this Agreement provided a 30-day notice
is received by Company.
AMERICAN GREETINGS CORPORATION
By: /s/ Pamela L. Linton Date:
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Pamela L. Linton
Senior Vice President
Human Resources
/s/ Patricia L. Ripple Date:
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Patricia L. Ripple
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