EXHIBIT 10.22
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AGREEMENT
THIS AGREEMENT ("Agreement") is made effective as of the 25th day of June
1999 (the "Effective Date") and is entered into by and between Xxxxx Corporation
(the "Company") and Wim X. X. Xxxxxxx ("Executive").
WHEREAS, as a result of his announcement in early 1999, Executive is
retiring from his employment with the Company and from his position as a
director of the Company;
WHEREAS, as a result of such announcement, a new chief executive officer of
the Company has been identified and hired and has commenced employment with the
Company;
WHEREAS, Executive and the Company desire to specify the terms of
Executive's retirement.
For and in consideration of the foregoing recitals and the mutual covenants
and agreements set forth herein, the Company and Executive agree as follows:
1. TERMINATION OF EMPLOYMENT AND DIRECTORSHIP STATUS. On July 16, 1999
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(representing a three (3) week transition period after the Effective Date),
Executive's employment with the Company and all Company affiliates shall
terminate, and Executive shall retire as a member in good standing of the Board
of Directors of the Company. Effective as of July 16, 1999, Executive's
Employment Agreement with the Company dated as of September 14, 1990 and that
certain letter dated February 5, 1999 from Xxxxx Xxxxx on behalf of the Company
to Executive shall terminate and be of no further force or effect.
2. PAYMENTS TO AND BENEFITS FOR EXECUTIVE. The Company agrees to provide
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Executive with the following payments and benefits:
x. Xxxxxxxxx Payment. On or before August 25, 1999, the Company
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shall pay Executive severance in the amount of $530,025 (less applicable
withholding), representing Executive's annual salary as of the Effective
Date of $265,012 per year for two years following the Effective Date.
b. Automobile Allowance. On or before August 25, 1999, the Company
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shall pay Executive the amount of $28,800 (less applicable withholding),
representing a car allowance of $1200 per month for two years following the
Effective Date.
c. Accrued Vacation. On or before August 25, 1999, the Company shall
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pay Executive for 12 weeks of accrued vacation time (less applicable
withholding).
d. 401(k) Plan Matching Contributions. On or before August 25, 1999,
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the Company will pay Executive $8,000 representing Company matching
contributions for Executive for the two years following the Effective Date
under the Company's 401(k) Plan, as if Executive had participated in the
401(k) Plan during such two years at the maximum level of participation
permitted for Executive under such plan. The Company shall pay Executive
additional amounts equal to (i) Executive's actual federal and state tax
liability arising out of payment to Executive of such matching
contributions and (ii) Executive's federal and state tax liability on such
tax payment (and additional tax payments).
e. Insurance. For two years following the Effective Date, the
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Company shall provide Executive (and his eligible family members
participating in such plans as of the Effective Date) with continued
health, dental and vision insurance, on substantially the same terms
(including scope of coverage and reimbursement) as provided on the
Effective Date. The Company shall convert the disability insurance and
life insurance policies benefiting Executive as of the Effective Date into
individual policies, and the Company shall pay the premiums on such
policies for two years following the Effective Date.
f. Acceleration and Extension of Certain Options. All options
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granted to Executive after
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EXHIBIT 10.22
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November 1994 and specified on Exhibit A attached hereto shall be and become
fully vested as of the Effective Date and shall be exercisable for their
respective entire terms. This Agreement shall be deemed to automatically amend
all contrary provisions of any stock option agreements relating to the options
set forth on Exhibit A.
g. Option Exercise Loan and Reimbursement of Taxes. On or before
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August 25, 1999, the Company shall provide Executive with a full-recourse,
interest-free loan for Executive to use to exercise the incentive stock options
and non-qualified options specified on Exhibit B attached hereto. Such loan
shall have a maturity date of five years after the date of the loan, shall be
secured by all of the shares of Company Common Stock issued to Executive upon
his exercise of the options specified on Exhibit B, and shall be evidenced by a
promissory note and pledge agreement substantially in form and substance
attached hereto as Exhibits C and D, respectively. The Company shall pay
Executive additional amounts equal to (i) Executive's actual federal and state
tax liability arising out of Executive's exercise of the options set forth on
Exhibit B (including, without limitation, any alternative minimum tax) and in
connection with any imputed income arising as a result of such loan being
interest-free, and (ii) Executive's actual federal and state tax liability on
such tax payment (and additional tax payments).
h. Cancellation of Indebtedness. On or before August 25, 1999, the
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Company shall return to Executive, marked "Canceled", the original Promissory
Note of Executive dated December 4, 1992, in the original (and currently
outstanding) principal amount of $150,000. The 31,756 shares of Company Stock
held as collateral for this note shall be returned to Executive. The Company
shall pay Executive additional amounts equal to (i) Executive's actual federal
and state tax liability arising out of any income Executive may recognize as a
result of the forgiveness of the loan evidenced by the December 4, 1992
promissory note and (ii) Executive's actual federal and state tax liability on
such tax payment (and additional tax payments).
i. Sale of Automobile. Upon the request of Executive on or before
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August 25, 1999, the Company shall sell to Executive the Cadillac STS used by
Executive as of the Effective Date, and the price for such car shall be the
Xxxxx Blue Book wholesale value thereof. If Executive does not so request,
Executive shall return such automobile to the Company on or before August 25,
1999.
j. The foregoing provisions of this Section 2 represent the Company's
sole obligations to Executive following termination of employment and
directorship of Executive with the Company.
3. MUTUAL GENERAL RELEASE.
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a. General Release by Executive. For valuable consideration, the
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receipt and adequacy of which are hereby acknowledged, Executive, acting on
behalf of himself and all Executive Releasees, does hereby release and forever
discharge the "Company Releasees" herein, consisting of the Company and each of
its respective subsidiaries, affiliates, successors, agents, directors,
officers, representatives, and all persons acting by, through, under, or in
concert with them, or any of them, of and from any and all manner of action or
actions, causes or causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liabilities, claims, demands, damages, losses,
costs or expenses, of any nature whatsoever, known or unknown, fixed or
contingent (hereinafter called "Claims"), which they now have or may hereafter
have against the Company Releasees by reason of any and all acts, omissions,
events or facts occurring or existing prior to the date hereof, except as
expressly provided herein. The Claims released hereunder include, without
limitation, any alleged breach of any employment agreement; any alleged breach
of any covenant of good faith and fair dealing, express or implied; any alleged
torts or other alleged legal restrictions relating to the Executive's employment
and the termination thereof; and any alleged violation of any federal, state or
local statute or ordinance including, without limitation, Title VII of the Civil
Rights Act of 1964, as amended, the Federal Age Discrimination in Employment Act
of 1967, as amended, and the California Fair Employment and Housing Act. This
Release shall not apply to (i) Executive's rights to indemnification under
Section 2802 of the California Labor Code, Section 317 of the California
Corporations Code and the Company's Bylaws, or (ii) Executive's rights under
this Agreement, or (iii) Executive's rights as a stockholder of the Company.
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EXHIBIT 10.22
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b. General Release by the Company. For valuable consideration, the
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receipt and adequacy of which are hereby acknowledged, the Company, acting on
behalf of itself and all Company Releasees, does hereby release and forever
discharge the "Executive Releasees" herein, consisting of Executive and his
estate and heirs and lawyers, or any of them, of and from any and all manner of
action or actions, causes or causes of action, in law or in equity, suits,
debts, liens, contracts, agreements, promises, liabilities, claims, demands,
damages, losses, costs or expenses, of any nature whatsoever, known or unknown,
fixed or contingent (hereinafter called "Claims"), which they now have or may
hereafter have against the Executive Releasees by reason of any and all acts,
omissions, events or facts occurring or existing prior to the date hereof,
except as expressly provided herein. The Claims released hereunder include,
without limitation, any alleged breach of any employment agreement; any alleged
breach of any covenant of good faith and fair dealing, express or implied; any
alleged torts or other alleged legal restrictions relating to the Executive's
employment and the termination thereof; and any alleged violation of any
federal, state or local statute or ordinance. This Release shall not apply to
the Company's rights under this Agreement.
c. RELEASE OF UNKNOWN CLAIMS. EXECUTIVE AND THE COMPANY
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(COLLECTIVELY THE "PARTIES") ACKNOWLEDGE THAT HE AND IT ARE FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
EXECUTIVE AND THE COMPANY BEING AWARE OF SAID CODE SECTION, HEREBY
EXPRESSLY WAIVE ANY RIGHTS EITHER OF THE PARTIES MAY HAVE THEREUNDER, AS WELL AS
UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
d. Release of Age Discrimination Claims and Rights under the Older
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Workers' Benefit Protection Act. Executive agrees and expressly acknowledges
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that this Agreement includes a waiver and release of all claims which Executive
or any Executive Releasee has or may have under the Age Discrimination in
Employment Act of 1967, as amended, 29 U.S.C. (S) 621, et seq. ("ADEA"). The
following terms and conditions apply to and are part of the waiver and release
of the ADEA claims under this Agreement:
(i) That this paragraph and this Agreement are written in a manner
calculated to be understood by Executive.
(ii) The waiver and release of claims under the ADEA contained in this
Agreement do not cover rights or claims that may arise after the date on which
Executive signs this Agreement.
(iii) This Agreement provides for consideration in addition to anything of
value to which Executive is already entitled.
(iv) Executive is advised to consult an attorney before signing this
Agreement.
(v) Executive is granted twenty-one (21) days after Executive is
presented with this Agreement to decide whether or not to sign this Agreement.
If Executive executes this Agreement prior to the expiration of such period,
Executive does so voluntarily and after having had the opportunity to consult
with an attorney.
(vi) Executive will have the right to revoke the waiver and release of
claims under the ADEA within seven (7) days of signing this Agreement. In the
event this waiver and release of claims is revoked, this Agreement shall be null
and void in its entirety.
e. Manner of Revocation. In the event that Executive elects to
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revoke this Mutual General Release, he shall deliver within the time period
prescribed above to the Chairman of the Company's Board of Directors, a writing
stating that he is revoking this Mutual General Release and subscribed by the
Executive.
f. Consequences of Revocation. In the event that Executive should
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elect to revoke this Mutual General Release as described in the paragraph above,
this Agreement shall be null and void in its entirety.
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EXHIBIT 10.22
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g. No Claims. Each of the Parties represent and warrant to the
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Company Releasees and the Executive Releasees (collectively, the "Releasees")
that there has been no assignment or other transfer of any interest in any Claim
which such Party may have against the Releasees, or any of them. The Company
agrees to indemnify and hold the Executive Releasees harmless from any
liability, claims, demands, damages, costs, expenses and attorneys' fees
incurred as a result of any person asserting any such assignment or other
transfer of any interest in any Claims under any such assignment or transfer
from the Company or any Company Releasee. Executive agrees to indemnify and hold
harmless the Company Releasees from any liability, claims, demands, damages,
costs, expenses and attorneys' fees incurred as a result of any person asserting
such assignment or other transfer of any interest in any Claims under any such
assignment or transfer from Executive or any Executive Releasee.
h. Indemnification. Each of the Parties agrees that if he or it
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hereafter commences, joins in, or in any manner seeks relief through any suit
arising out of, based upon, or relating to any of the Claims released hereunder
or in any manner asserts against the Releasees any of the Claims released
hereunder, then the Party asserting such Claim(s) will pay to the Releasees
against whom such Claim(s) is asserted, in addition to any other damages caused
thereby, all attorneys' fees incurred by such Releasees in defending or
otherwise responding to said suit or Claim.
i. No Admission of Liability. The Parties understand and agree
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that neither the payment of money nor the execution of this Agreement shall
constitute or be construed as an admission of any liability whatsoever by the
Releasees.
4. CONFIDENTIAL INFORMATION AND TRADE SECRETS. Executive acknowledges
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that he has had access to and actual knowledge of confidential information and
trade secrets, which were entrusted to him in his fiduciary capacity as an
employee, officer and director of the Company, and that for a period of two
years following the Effective Date he has a duty not to disclose or use, for his
or any other person's benefit, such information, except for information that is
or becomes part of the public domain or is disclosed to Executive by a third
party under no obligation of confidentiality to the Company. Executive agrees
that such information includes, without limitation, the identity of the
Company's actual and targeted customers, suppliers, business partners, and
contacts; the business plans and finances of the Company; technical processes
and information developed by the Company; and business processes developed by
the Company.
5. NO DISPARAGEMENT. Executive agrees that he will not make any
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disparaging, negative or other statements regarding the Company, its affiliates
or any of the Company's or its affiliates' officers, directors or Executives
which could reasonably be believed in any way to have an adverse effect on the
business or affairs of the Company or its affiliates or otherwise be injurious
to or not be in the best interests of the Company, its affiliates or any such
other persons. Executive also agrees not to aid in, assist in, or encourage the
pursuit of, litigation against the Company by any other person or entity
relating to any events, circumstances, acts or omissions occurring while
Executive was an officer of the Company. The Company agrees that will not make
any disparaging, negative or other unfavorable statements regarding Executive.
6. ADVICE OF COUNSEL. Executive represents and warrants that he has read
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this Agreement, that he has had adequate time to consider it, that he had been
advised by the Company to consult with an attorney and has consulted with an
attorney prior to executing this Agreement, that he understands the meaning and
application of this Agreement and that he has signed this Agreement knowingly,
voluntarily and of his own free will with the intent of being bound by it.
7. SEVERABILITY; MODIFICATION OF AGREEMENT. If any provision of this
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Agreement shall be found invalid or unenforceable in whole or in part, then such
provisions shall be deemed to be modified or restricted to the extent and in the
manner necessary to render the same valid and enforceable or shall be deemed
excised from this Agreement as such circumstances may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by law
as if such provision had been originally incorporated herein as so modified or
restricted or as if such provision had not been originally incorporated herein,
as the case may be.
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EXHIBIT 10.22
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8. ARBITRATION. Except for claims for emergency equitable or injunctive
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relief which cannot be timely addressed through arbitration, the parties hereby
agree to submit any claim or dispute arising out of the terms of this Agreement
(including exhibits) and/or any dispute arising out of or relating to
Executive's employment with the Company in any way, to private and confidential
arbitration by a single neutral arbitrator through JAMS/Endispute. Subject to
the terms of this paragraph, the arbitration proceedings shall be governed by
the then current JAMS/Endispute rules governing employment disputes, and shall
take place in Los Angeles, California. The decision of the arbitrator shall be
final and binding on all parties to this Agreement, and judgment thereon may be
entered in any court having jurisdiction. The Parties shall share equally the
arbitrator's fee and all costs of services provided by the arbitrator and
arbitration organization; however, all costs of the arbitration proceeding or
litigation to enforce this Agreement, including attorneys' fees and witness
expenses, shall be paid as the arbitrator or court awards in accordance with
applicable law. Except for claims for emergency equitable or injunctive relief
which cannot be timely addressed through arbitration, this arbitration procedure
is intended to be the exclusive method of resolving any claim relating to the
obligations set forth in this Agreement.
9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
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to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns. Notwithstanding the foregoing, neither this Agreement
nor any rights hereunder may be assigned to any party by Executive without the
prior written consent of the Company, except that all or a part of the options
referenced on Exhibit A may be transferred pursuant to a qualified domestic
relations order.
10. ENTIRE AGREEMENT. Executive and the Company each represent and
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warrant that no promise or inducement has been offered or made except as set
forth herein and that the consideration stated herein is the sole consideration
for this Agreement, provided, however, that any agreements relating to any
outstanding options of Executive are not superseded or discharged by this
Agreement, except to the extent expressly modified by this Agreement. The
parties agree that this Agreement shall be construed and enforced in accordance
with the laws of the State of California.
Wim X. X. Xxxxxxx Xxxxx Corporation
/s/ Wim X. X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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