TERMINATION AGREEMENT
AND FULL AND FINAL RELEASE
Xxxxxxxxxx Laboratories, Inc. (Xxxxxxxxxx") and Xxxxx X. Xxxxxxxxxxx
("Xxxxxxxxxxx") hereby agree upon a compromise and full and final settlement
of all issues and disputes between them on the terms set forth below:
1. Salary and Benefits. In accordance with Xxxxxxxxxx'x existing
policies, Xxxxxxxxxxx has received or will receive the following pay and
benefits regardless of whether she enters into this Agreement: (i) payment of
Xxxxxxxxxxx'x regular base salary through May 23, 1997, less all normal
withholdings; (ii) payment for all accrued and unused vacation leave through
May 23, 1997, less all normal withholdings. In addition, Xxxxxxxxxx will
settle promptly all authorized reimbursable business expenses, if any, when
Xxxxxxxxxxx has submitted appropriate documentation to Xxxxxxxxxx.
2. Special Separation Benefits. In consideration of the General
Release, Nondisparagement, and Confidentiality Obligations provisions of this
Agreement, and contingent upon Xxxxxxxxxxx'x acceptance of the terms of this
Agreement, Xxxxxxxxxx offers to continue to employ Xxxxxxxxxxx as an inactive
employee at a salary rate of $8,333.33 per month, payable in accordance with
its normal payroll practices and subject to normal withholdings, from May 24,
1997 to December 1, 1997 (the "Inactive Period"), under the following
conditions: (1) During the Inactive Period, Xxxxxxxxxxx agrees to use her
best efforts to seek employment with a company other than Xxxxxxxxxx.
Xxxxxxxxxxx may employ the services of an outplacement agency of her choosing,
and, contingent upon pre-approval by Carrington, Carrington agrees to pay
reasonable and customary fees associated with certain of those services
contracted for and provided no earlier than forty-five (45) days after
June 2, 1997. (2) In the event that Xxxxxxxxxxx becomes a fulltime employee
of a company other than Xxxxxxxxxx on or before December 1, 1997,
Xxxxxxxxxxx will immediately advise Xxxxxxxxxx of such other employment and
commencement date thereof. Upon the commencement date Xxxxxxxxxxx'x other
employment, Xxxxxxxxxx'x obligation under this Agreement will then be
reduced from $8,333.33 per month to $4,166.67 per month for the period
beginning with the commencement date of other employment through December 1,
1997. Xxxxxxxxxx at its sole option may elect to pay its obligation remaining
under this Agreement either as one lump sum payment or continue the equal
biweekly payments through December 1, 1997. (3) In the event that Xxxxxxxxxxx
does not become a fulltime employee of a company other than Xxxxxxxxxx on or
before December 1, 1997, Xxxxxxxxxxx and Xxxxxxxxxx may mutually agree to
extend this Agreement and compensation payable hereunder on a month-to-month
basis for a period of up to an additional three (3) months.
3. Employee Benefit Plans. In consideration of the General Release,
Nondisparagement, and Confidentiality Obligations provisions of this
Agreement, and contingent upon Xxxxxxxxxxx'x acceptance of the terms of
this Agreement, Xxxxxxxxxx offers to continue Xxxxxxxxxxx'x eligibility to
participate in any group insurance or stock purchase plans offered by
Xxxxxxxxxx, subject to the terms of each such plan and provided she timely
pays any cost that she would be required as an employee to pay in connection
therewith, until the earlier of her commencement of other employment or
December 1, 1997, unless earlier terminated in accordance with the terms of
any such plan, except to the extent, if any, that she is entitled, and
elects, to continue insurance coverage thereafter at her own expense pursuant
to the Consolidated Omnibus
1
E-2
Budget Reconciliation Act.
4. Stock Options. For purposes of determining Xxxxxxxxxxx'x date of
termination of employment with Xxxxxxxxxx as it relates to any stock option
grants by Xxxxxxxxxx to Xxxxxxxxxxx, Xxxxxxxxxxx'x Employment Termination
Date will be December 1, 1997. Xxxxxxxxxxx understands that all stock options
will expire on the close of business on the 30th day following the Employment
Termination Date, unless they are earlier exercised or terminated or they
earlier expire in accordance with their terms, or unless the period for their
exercise is extended in accordance with their respective terms due to the
termination of Xxxxxxxxxxx'x employment with Xxxxxxxxxx by reason of her death
or disability.
5. Services. During the Inactive Period, Xxxxxxxxxxx agrees to make
herself available to Xxxxxxxxxx from time to time, and to perform for
Xxxxxxxxxx upon reasonable request by Xxxxxxxxxx, services (hereinafter
referred to as the "Services"). The Services shall include such services as
Xxxxxxxxxxx performed for Xxxxxxxxxx as Chief Financial Officer. Xxxxxxxxxxx
will specifically exercise her best efforts to secure for Xxxxxxxxxx a bank
line of credit consistent with Xxxxxxxxxx'x corporate objectives.
6. Authority. Except when performing services described in Section 5
of this Agreement, after May 23, 1997, Xxxxxxxxxxx has not been and will not be
obligated or authorized, and has not held herself out and shall not hold herself
out as being authorized, to make any representations, enter into any contracts,
commitments, or obligations, or perform any other acts of any kind whatsoever
on behalf of Xxxxxxxxxx, nor has Xxxxxxxxxxx been and will not be authorized
to hold herself out as an agent or active employee of Xxxxxxxxxx after May 23,
1997.
7. General Release. Xxxxxxxxxxx and her family members, heirs,
successors, and assigns (hereinafter referred to collectively as the "Releasing
Parties") hereby release, acquit and forever discharge Xxxxxxxxxx and its
shareholders, officers, directors, fiduciaries, agents, servants, employees,
representatives, attorneys, insurers, successors, and assigns (hereinafter
referred to collectively as the "Released Parties") from any and all claims,
demands, and causes of action of every kind and character, whether vicarious,
derivative, or direct, that any of the Releasing Parties now has or may
hereafter have or assert against any or all of the Released Parties growing
out of, resulting from, or connected in any way with Xxxxxxxxxxx'x employment
or the termination of her employment with Xxxxxxxxxx, including but not
limited to any and all claims for damages (actual, exemplary, liquidated, or
unliquidated), back pay, future pay, deferred compensation, bonuses,
commissions, severance payments, vacation and leave benefits, unreimbursed
business expenses, overtime compensation, reinstatement or priority placement,
past and future medical or other employee benefits for Xxxxxxxxxxx or her
dependents, employee retirement benefits, contributions to company sponsored
401(k) plans (except as presently vested in any savings plan sponsored by
Xxxxxxxxxx in which Xxxxxxxxxxx is a participant), medical and counseling costs,
injunctive relief, declaratory relief, attorney's fees, costs of court,
disbursements, interest, or any other form whatsoever of legal or equitable
relief to which any of the Releasing Parties claims or might claim entitlement
as a result of any alleged act or omission of any of the Releasing Parties,
including but not limited to any alleged
2
E-3
unlawful age discrimination or any other form of unlawful employment
discrimination, retaliation, wrongful termination, breach of contract (express
or implied), tortious interference with contract, promissory estoppel,
detrimental reliance, negligent or intentional infliction of emotional
distress, negligent hiring and supervision, assault, battery, defamation of
character, any alleged act of harassment or intimidation, negligent or
intentional misrepresentation or fraud, invasion of privacy, or any other
intentional or negligent tort, or any alleged violation of the Age
Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of
1964, the Texas Commission on Human Rights Act, the Americans With Disabilities
Act, the Employee Retirement Income Security Act of 1974, the public policy
of the United States, the State of Texas, or any other state, or any other
federal or state statutory or common law, or any other alleged adverse
employment action by any of the Released Parties, and all other loss, expense,
or detriment of every kind and character, whether past or future, that any of
the Releasing Parties may have sustained or may hereafter sustain by reason of
any act or omission of any of the Released Parties growing out of, resulting
from, or connected in any way with Xxxxxxxxxxx'x employment or the
termination of her employment with Xxxxxxxxxx. This general release does not
apply to any rights or claims that may arise after the date this Agreement is
executed by Xxxxxxxxxxx.
8. Nondisparagement. Xxxxxxxxxxx shall not make any statements, orally
or in writing, or engage in any other acts that would directly or indirectly
cause any harm or damage to Xxxxxxxxxx or any of the other Released Parties.
9. Confidentiality Obligations. Xxxxxxxxxxx acknowledges and confirm all
agreements and obligations, including the obligation of confidentiality, set
forth in that certain Employee's Confidentiality and Invention Agreement by and
between Xxxxxxxxxx and Xxxxxxxxxxx, which is attached as Appendix A, and shall
be executed or reconfirmed in conjunction with this Agreement. In addition,
Xxxxxxxxxxx agrees that the terms of this Agreement shall be and remain
confidential, and shall not be disclosed by her to any person other than her
spouse, attorney, and accountant or tax return preparer if such persons have
agreed to keep such information confidential, and except as may be required
by law or judicial process. If any confidential information is released by
Xxxxxxxxxxx, such release shall be grounds for immediate termination of all
benefits listed herein.
10. Effect of Breach. Xxxxxxxxxxx acknowledges and agrees that should
she or any of the other Releasing Parties breach any of their obligations set
forth in this Agreement, (i) Xxxxxxxxxx will have no further obligation to
comply with its undertakings in Sections 2 or 3 hereof, but that all of the
other provisions of this Agreement shall remain in full force and effect; (ii)
Xxxxxxxxxxx may be required to repay any payments made to her and reimburse
Xxxxxxxxxx for any payments made on her behalf or for her benefit pursuant to
Sections 2 and 3 hereof; (iii) the Releasing Parties also may be liable for
any of the Released Parties' damages caused by the breach, including without
limitation their costs and attorney's fees incurred in defending claims
brought in breach of this Agreement or bringing claims to enforce this
Agreement.
11. Effect and Use of Agreement. Xxxxxxxxxxx agrees that this Agreement
does not in any manner constitute an admission of liability or wrongdoing on
the part of Xxxxxxxxxx or any
3
E-4
of the other Released Parties, but that Xxxxxxxxxx expressly denies any such
liability or wrongdoing and enters into this Agreement in compromise and
settlement of a disputed claim for the sole purpose of avoiding trouble,
litigation and expense. Xxxxxxxxxxx further agrees that, except to the extent
necessary to enforce this Agreement, neither this Agreement nor any part of it
may be construed, used, or admitted into evidence in any judicial,
administrative, or arbitral proceeding as an admission of any kind by
Xxxxxxxxxx or any of the other Released Parties.
12. Representation Regarding Certain Laws. Xxxxxxxxxxx understands and
acknowledges that various state and federal laws (including the Age
Discrimination in Employment Act of 1967) prohibit discrimination in
employment based on sex, race, age, color, national origin, religion,
disability, citizenship and veteran status, and that the law also prohibits
breach of contract (express or implied) and intentional or negligent tortious
conduct.
13. Effective Period of Offer. Xxxxxxxxxx'x offer of the terms set
forth in this Agreement will expire at midnight on the fourteenth day following
the date of Xxxxxxxxxx'x execution of this Agreement, i.e., on June 16, 1997.
Xxxxxxxxxxx may accept this offer at any time before such expiration by
executing this Agreement and returning it to Xxxxxxxxxx.
14. Effective Date of Agreement. This Agreement will become effective and
enforceable seven (7) days after Xxxxxxxxxxx'x execution and delivery to
Xxxxxxxxxx of this Agreement (the "Effective Date"). At any time before the
Effective Date, Xxxxxxxxxxx may revoke her acceptance of this Agreement.
15. Consulting With An Attorney. Xxxxxxxxxx hereby advises Xxxxxxxxxxx
to consult an attorney before executing this Agreement.
16. Representation Regarding Meaning and Execution of Agreement.
Xxxxxxxxxxx further acknowledges and represents that she has read this
Agreement, that she has had the opportunity to have this Agreement read and
explained to her by her attorney, that she fully understands the meaning and
effect of her action in executing this Agreement, and that her execution of
this Agreement is knowing and voluntary.
17. Miscellaneous. Xxxxxxxxxxx and Xxxxxxxxxx agree that this Agreement
and the Confidentiality Agreement (a) contain and constitute the entire
understanding and agreement between them regarding the subject matter hereof;
(b) contain captions and definitions that are included only for convenience or
reference and are not intended and shall not be construed to change the express
provisions of the Agreement; (c) supersede and cancel any previous negotiations,
agreements, commitments and writings regarding the subject matter of this
Agreement; (d) may not be released, discharged, abandoned, supplemented,
changed or modified in any manner except by a writing of concurrent or
subsequent date signed by both parties hereto; (e) are binding on and shall
inure to the benefit of Xxxxxxxxxxx, her heirs, successors and assigns, and
Xxxxxxxxxx and its successors and assigns, and that the terms of Section 5
hereof shall inure to the benefit of all of the Released Parties; and (f)
shall be governed by and construed in accordance with the laws of the State
of Texas and the applicable laws of the
4
E-5
United Sates. Xxxxxxxxxxx and Xxxxxxxxxx further agree that (i) if any
provision of this Agreement is held to be unenforceable, such provision shall
be considered to be separate, distinct, and severable from the remaining
provisions of this Agreement and shall not affect the validity or
enforceability of such remaining provisions, all of which shall remain in full
force and effect; and (ii) if any provision of this Agreement is held to be
unenforceable as written but may be made to be enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by applicable law.
SIGNED on the dates shown below.
XXXXXXXXXX LABORATORIES, INC.
Dated: June 2, 1997 By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
Dated: June 2, 1997 By: /s/ Xxxxx X. Xxxxxxxxxxx
-------------------------
Xxxxx X. Xxxxxxxxxxx
5
E-6
