AGREEMENT AND RELEASE
IT IS HEREBY STIPULATED AND AGREED by and between XXXXXX X.
XXXXXXXX ("XXXXXXXX") and XXXXXXX INVESTMENTS, INC. ("XXXXXXX"), for
the good and sufficient consideration set forth below, as follows:
1. XXXXXXX INVESTMENTS, INC., as used herein, shall at all times mean
XXXXXXX INVESTMENTS, INC., its parent, subsidiaries (including, but not limited
to Xxxx X. Xxxxxxx & Co., Inc., PRIMEVEST Financial Services, Inc. and
Headwaters Capital Management, LLC), successors and assigns, its affiliated and
predecessor companies, their successors and assigns, their affiliated and
predecessor companies and the present or former directors, officers, employees,
shareholders and agents of any of them, whether in their individual or official
capacities, and the current and former trustees or administrators of any pension
or other benefit plan applicable to the employees or former employees of XXXXXXX
INVESTMENTS, INC., in their official and individual capacities.
2. XXXXXXXX hereby agrees that on the Effective Date of this Agreement
and Release, as set forth in Paragraph 5 hereof, he voluntarily resigns all of
his positions of employment with XXXXXXX, including, but not limited to (1)
Chairman of the Board of Directors of XXXXXXX INVESTMENTS, INC., (2) a member of
XXXXXXX INVESTMENTS, INC.'s Board of Directors, (3) an Officer of XXXXXXX
INVESTMENTS, INC., (Including the position of President and Chief Executive
Officer), (4) an employee of XXXXXXX INVESTMENTS, INC., (5) Chairman of the
Board of Directors of Xxxx X. Xxxxxxx & Co., Inc. ("JGK"), (6) a member of JGK's
Board of Directors, (7) an Officer of JGK (including, but not limited to
President and Chief Executive Officer), (8) an employee of JGK, (9) a member of
PRIMEVEST Financial Service, Inc.'s Board of Directors, and (10) Governor of
Headwaters Capital Management, LLC.
3. Specifically, in consideration for XXXXXXXX'x agreement to the terms
hereof, XXXXXXX agrees to pay XXXXXXXX the payments and provide XXXXXXXX the
benefits as described below:
(a) Severance pay in the form of salary continuation
(according to regular payroll practices at his regular base salary as of
September 14, 1995) for the period from September 15, 1995, through December 31,
1995, in the amount of FORTY-THREE THOUSAND, SEVEN HUNDRED FIFTY DOLLARS AND NO
CENTS ($43,750.00), which salary continuation shall be subject to appropriate
federal, state and FICA and other tax withholdings.
(b) Severance pay in the total amount of TWO HUNDRED-FIFTY
THOUSAND DOLLARS AND NO CENTS ($250,000.00), to be paid in twenty (20) bimonthly
payments of TWELVE THOUSAND FIVE HUNDRED DOLLARS AND NO CENTS ($12,500.00),
during the period from January 1996 through October 1996, which payments shall
be subject to federal and state tax and FICA withholdings.
(c) A lump sum payment in the gross amount of ONE HUNDRED
FORTY- THREE THOUSAND SEVEN HUNDRED FIFTY DOLLARS AND NO/CENTS ($143,750.00) for
claims for personal injury, pain and suffering, emotional anguish, distress and
anxiety, loss of self esteem, humiliation, and damage to his personal
reputation, to be paid on the Effective Date of this Agreement and Release as
described below in Paragraph 5.
(d) In the event of XXXXXXXX'x death prior to the making of
any payment due under Paragraphs 3(a) through 3(c), such payment shall be made
to the beneficiary designated by XXXXXXXX for the purposes of this Agreement, if
any, otherwise to the personal representative of XXXXXXXX'x estate.
(e) Payment to XXXXXXXX'X attorneys, Xxxxxxx, Xxxxxxx & Xxxxx,
in an amount not to exceed FIVE THOUSAND DOLLARS AND NO CENTS ($5,000.00),
within five (5) days of Xxxxxxx, Xxxxxxx & Xxxxx'x submission of a detailed
invoice to XXXXXXX.
(f) Subject to the terms of Paragraph 3(d), XXXXXXXX agrees
that neither he nor his attorneys will make any claim against XXXXXXX for
attorneys' fees, costs, interest or any and all other expenses which may have
been incurred by XXXXXXXX.
(g) XXXXXXXX shall also receive a contribution for 1995 to the Xxxx X.
Xxxxxxx and Company, Incorporated Employee Stock Ownership Plan, pro rated at
seven- twelfths (7/12ths) the annual contribution.
(h) The PARTIES acknowledge that recovery for personal injury
damages, as described above in Paragraph 3(c), may be compensated in accordance
with Section 104(a)(2) of the Internal Revenue Code of the United States [26
U.S.C. ss. 104(a)(2)] and the administrative regulations promulgated thereunder
as well as recent federal appellate court decisions. Therefore, there shall be
no deduction for state or federal taxes, FICA taxes, or any other tax deduction
or reporting.
(i) XXXXXXX makes no warranty concerning the tax treatment of any sums paid
hereunder under said laws, and XXXXXXXX has not relied on any such warranty.
Further, XXXXXXXX agrees to indemnify XXXXXXX and hold XXXXXXX harmless from any
claim against XXXXXXX resulting from the characterization and tax treatment of
the payments made under Paragraph 3(c).
(j) In addition to the above-described payments, XXXXXXXX
shall also be eligible to receive the medical and life insurance benefits he
previously received as an employee through December 31, 1995, at which time he
shall become eligible for his COBRA rights.
(k) XXXXXXXX shall be eligible to exercise his stock options
in accordance with the terms of his option agreements and the Xxxxxxx 1990 Stock
Option Plan and 1992 Employee Stock Ownership Plan.
4. (a) XXXXXXXX acknowledges that he was given at least twenty-one (21)
days after September 20, 1995, which was the date he received a copy of this
Agreement and Release, to consider whether the terms of this Agreement and
Release are acceptable to him. Insofar as XXXXXXXX may have signed this
Agreement and Release prior to the expiration of such twenty-one (21) day
period, he hereby acknowledges that he did so freely and voluntarily, and upon
advice of his legal counsel to the effect that his so doing does not impair the
validity of any release given by him hereunder.
(b) Notification of Rights Pursuant to the Minnesota Human Rights Act
(Minnesota Statutes & 363.01. et seq.) and the Federal Age Discrimination in
Employment Act, (29 U.S.C. ss. 621 et seq.) XXXXXXXX is hereby notified of his
right to rescind the release of claims in regard to claims arising under the
Minnesota Human Rights Act, Minnesota Statutes Chapter 363, within fifteen (15)
days of the signing of this Agreement and Release, and with regard to his rights
under the federal Age Discrimination in Employment Act, 29 U.S.C. ss. 621, et
seq., within seven (7) days after the signing of this Agreement and Release. In
order to be effective, the rescission must be in writing and delivered to Xxxxxx
X. Xxxxxxx, Secretary, Xxxxxxx Investments, Inc., 000 0xx Xxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, by hand or mail. If delivered by mail, the
rescission must be postmarked within the required period, properly addressed to
Xxxxxx X. Xxxxxxx, as set forth above, and sent by certified mail, return
receipt requested. It is further understood that if XXXXXXXX rescinds the
release of claims, in accordance with this Paragraph 4(a), that XXXXXXX shall
have no obligation to make the payments or provide the benefits as described in
Paragraph 3 of this Agreement and XXXXXXXX shall immediately repay any monies
paid to him pursuant to this Agreement and Release on or after September 14,
1995.
(c) Acknowledgement of Reading and Understanding Consultation
With Counsel: Period to Consider Agreement. XXXXXXXX, by his signature to this
Agreement, acknowledges and agrees that he has carefully read and understood all
provisions of this Agreement, and that he has entered into this Agreement
knowingly and voluntarily. XXXXXXXX further acknowledges that XXXXXXX has
advised him to consult with counsel prior to signing this Agreement, and
XXXXXXXX acknowledges that he has consulted with or had the opportunity to
consult with legal counsel.
5. The Effective Date of this Agreement and Release shall be on the
eighteenth (18th) day after XXXXXXXX signs this Agreement and Release, as set
forth in Paragraph 4(a) hereof.
6. XXXXXXXX agrees that he has or will return to XXXXXXX all property
in his possession, including but not limited to all customer lists, computer
discs, employment manuals, records, correspondence and any and all other
documents or materials.
7. XXXXXXX specifically denies any liability to XXXXXXXX for any and
all claims which have been or could be asserted by XXXXXXXX against XXXXXXX and
neither this Agreement and Release, nor anything contained herein, shall be
construed as an admission by XXXXXXX of any liability or unlawful conduct
whatsoever. XXXXXXXX specifically denies any liability to XXXXXXX for any and
all claims which have been or could be asserted by XXXXXXX against XXXXXXXX and
neither this Agreement and Release, nor anything contained herein, shall be
construed as an admission by XXXXXXXX of any liability or unlawful conduct
whatsoever.
8. XXXXXXXX agrees that for the period from September 15, 1995, through
September 14, 1996, XXXXXXXX shall not, directly or indirectly, induce any
employee of XXXXXXX or its subsidiaries to engage, directly or indirectly, in
competition with XXXXXXX in any manner or capacity (e.g., as a principal, agent,
partner, officer, director, stockholder, employee or otherwise), in any aspect
of the securities, brokerage and/or investment business which XXXXXXX is engaged
in on September 15, 1995, or solicit any customers of XXXXXXX or its
subsidiaries, directly or indirectly, for purposes competitive with XXXXXXX or
its subsidiaries. Nothing in this Paragraph 8 shall be interpreted to prohibit
XXXXXXXX from continuing to offer brokerage services to those persons who were
his customers during the time he was employed with XXXXXXX. The parties agree
that XXXXXXX would not have an adequate remedy at law for the breach of any
provision of this Paragraph 8 so, in addition to any other relief afforded by
law, XXXXXXX shall have the right to enforce any provision of this Paragraph 8
by preliminary temporary and permanent injunctive relief against XXXXXXXX and
any other person concerned thereby; it being understood that both damages and
injunctive relief
shall be proper modes of relief and are not to be considered as alternative
remedies. XXXXXXX seeking such relief shall not be considered a breach of
XXXXXXX'x right to demand arbitration. In the event of any breach of this
Paragraph 8 by XXXXXXXX, the duration of XXXXXXXX'x obligation under this
Paragraph 8 shall automatically be extended beyond its then-scheduled expiration
date for an additional period equal to the duration of the breach, provided an
action shall have been commenced on account of such breach during the initial
period of XXXXXXXX'x obligation under this Paragraph 8. In the event that a
court of competent jurisdiction determines that any provision of this Agreement
is unreasonable, it may limit such provision to the extent it deems reasonable,
without declaring the provision invalid in its entirety. The preceding sentence
shall not be construed as an admission by XXXXXXX, but is only included to
provide XXXXXXX with the maximum possible protection consistent with the right
of XXXXXXXX to earn a livelihood subsequent to the termination of his
employment.
9. THE PARTIES, for themselves, heirs, legal representatives, estates
and successors in interest, hereby releases and forever discharges each other of
and from any and all actions or causes of action, suits, debts, claims,
complaints, contracts, controversies, agreements, promises, damages, claims for
attorneys fees, judgments, costs, disbursements, severance benefits, bonuses,
deferred compensation and demands whatsoever, in law or entity, they ever had,
now have, or shall have as of the Effective Date of this Agreement and Release,
including, but not limited to, any alleged violation of any federal, state or
local law, regulation or ordinance prohibiting discrimination or other unlawful
activity on the basis of race, color, creed, marital status, sex, age, religion,
national origin, handicap, sexual harassment, disability or any other basis, or
any alleged obligation created by statute (including, but not limited to the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act and the Minnesota Human Rights Act), ordinance,
rule or regulation or by common law contract or tort theory, that they ever had,
now have or shall have as of the Effective Date of this Agreement and Release;
provided, that this release shall not extend to claims arising under the terms,
or by reason of any breach, of this Agreement.
10. THE PARTIES agree to release and discharge each other not only from
any and all claims which they could make on their own behalf, but also those
which may or could be brought by any other person or organization in their
behalf, and they specifically waive any right to become, and promises not to
become, a member of any class in any proceeding or case in which a claim or
claims against the other arise, in whole or in part, from any event which
occurred as of the date of this Agreement and Release.
11. THE PARTIES affirm that they have not caused or permitted to be
filed any charge, complaint or action against each other. In the event that
there is outstanding any such charge, complaint, or action, the PARTIES agree to
seek their immediate withdrawal and dismissal with prejudice. In the event that
for any reason said charge, complaint, or action is not withdrawn, the PARTIES
agree not to voluntarily testify, provide documents, or otherwise participate,
or to permit others to voluntarily participate on their behalf, in any
investigation or litigation arising therefrom or associated therewith and to
execute such other papers or documents as their respective counsel determines
may be necessary to have said charge, complaint or action dismissed with
prejudice.
12. XXXXXXXX shall be entitled to indemnification from XXXXXXX as set forth
in the XXXXXXX'x Bylaws, which provide, among other things, that the
indemnification provided for in the Bylaws continues as to a person who ceases
being a director, officer, employee or agent of XXXXXXX.
13. All terms and conditions of this Agreement shall be kept strictly
confidential by all PARTIES hereto until disclosed by XXXXXXX in accordance with
disclosure requirements of federal securities laws; disclosure by XXXXXXX of any
term or condition shall not waive the obligation of confidentiality as to any
other terms or conditions. 14. XXXXXXXX promises and agrees not to disclose,
either directly or indirectly, in any manner whatsoever, any information of any
kind regarding either (a) the substance or the existence of any belief he or any
other person may have that XXXXXXX engaged in any unlawful or tortious conduct
towards him, or breached any contract, or (b) subject to paragraph 13 above, the
terms of this Agreement and Release, to any person or organization, including,
but not limited to, representatives of local, state or federal agencies, members
of the press and media, present and former officers, employees and agents of
XXXXXXX, and other members of the public. The PARTIES agree that XXXXXXX would
not have an adequate remedy at law for the breach of any provision of this
Paragraph 14 so, in addition to any other relief afforded by law, XXXXXXX shall
have the right to enforce any provision of this Paragraph 13 by preliminary
temporary and permanent injunctive relief against XXXXXXXX and other person
concerned thereby; it being understood that both damages and injunctive relief
shall be proper modes of relief and are not to be considered as alternative
remedies. XXXXXXX seeking such relief shall not be considered a breach of
XXXXXXX'x right to demand arbitration. In the event that XXXXXXX takes steps to
seek relief from an alleged breach of this Paragraph all of the remaining
provisions of this Agreement and Release shall remain in full force and effect.
This Paragraph shall not prohibit XXXXXXXX from (i) discussing the consideration
being provided him pursuant thereto with his tax advisors, (ii) accurately
reporting the nature of the consideration being provided him pursuant thereto on
his income tax returns, (iii) discussing the underlying terms of this Agreement
and Release with his attorneys, his wife or his medical doctors, (iv) advising a
governmental taxing authority of the said consideration or of the existence of
this Agreement and Release, in response to a question or questions posed by such
taxing authority, (v) testifying pursuant to a court order or a subpoena issued
by a governmental agency which appears valid on its face, (vi) revealing the
terms of this Agreement and Release as required by and in accordance with any
law, regulation or ordinance, or (vii) stating "the matter has been resolved and
the terms of the resolution are confidential" in response to an inquiry.
15. Notwithstanding any provisions contained in this Agreement,
XXXXXXXX agrees that he will fully cooperate as a witness for XXXXXXX with
respect to any current or future litigation, arbitration or dispute, including
but not limited to being available for deposition testimony, trial testimony,
preparation of written discovery or responses to written discovery. XXXXXXX
shall reimburse XXXXXXXX for reasonable expenses reasonably incurred by him in
connection with such activities, including lost wages (not to exceed $600.00 per
day unless mutually agreed upon).
16. The PARTIES to this Agreement and Release mutually agree that they
shall not defame or disparage the other party.
17. Any dispute arising out of or relating to this Agreement or the alleged
breach of it, or the making of this Agreement, including claims of fraud in the
inducement, shall be discussed between the disputing parties in a good faith
effort to arrive at a mutual settlement of any such controversy. If,
notwithstanding, such dispute cannot be resolved, such dispute shall be settled
by binding arbitration (subject to XXXXXXX'x right to seek injunctive relief as
set forth in Paragraphs 8 and 14.) Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall be a retired state or federal judge or an attorney who has
practice securities or business litigation for at least 10 years. If the parties
cannot agree on an arbitrator within 20 days, any party may request that the
chief judge of the District Court for Hennepin County, Minnesota, select an
arbitrator. Arbitration will be conducted pursuant to the provisions of this
Agreement, and the commercial arbitration rules of the American Arbitration
Association, unless such rules are inconsistent with the provisions of this
Agreement. Limited civil discovery shall be permitted for the production of
documents and taking of depositions as permitted under such rules. Unresolved
discovery disputes may be brought to the attention of the arbitrator who may
dispose of such dispute. The arbitrator shall have the authority to award any
remedy or relief that a court of this state could order or grant. The arbitrator
may award to the prevailing party, if any, as determined by the arbitrator, all
of its costs and fees, including the arbitrator's fees, administrative fees,
travel expenses, out-of-pocket expenses; provided, that each party shall pay its
own attorneys' fees. Unless otherwise agreed by the parties, the place of any
arbitration proceedings shall be Hennepin County, Minnesota.
18. This Agreement and Release shall be construed under and governed by the
laws of the State of Minnesota.
19. If any provision of this Agreement and Release shall, for any
reason, be breached by a party hereto or be adjudged to be void, invalid or
unenforceable, the remainder of this Agreement and Release shall nonetheless
continue and remain in full force and effect.
20. All notices from or to any of the parties hereto shall be in
writing and shall be considered to have been duly given if sent by certified or
registered United States mail postage prepaid, return receipt requested, to the
other party at such address as both parties may hereafter designate to the
other.
21. This Agreement and Release may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
22. This Agreement and Release shall be binding upon, and each and
every benefit and obligation provided for herein shall inure to, the PARTIES
hereto and their respective heirs, legal representatives, successors, affiliated
entities, transferees or assigns.
23. The waiver by XXXXXXX or XXXXXXXX of the breach or nonperformance
of any provision of this Agreement and Release by the other will not operate or
be construed as a waiver of any future breach or nonperformance under any such
provision of this Agreement and Release or any similar agreement with any other
employee.
24. This Agreement and Release contains the full agreement of the PARTIES
and may not be modified, altered or changed in any respect except upon the
express prior written consent of both PARTIES hereto. The PARTIES hereby agree
and acknowledge that this Agreement and Release supersedes and terminates any
prior agreements and understandings between the PARTIES. The PARTIES, who have
negotiated with respect to the terms hereof, have read the foregoing Agreement
and Release, have consulted with counsel, and understand the meaning of each of
the terms hereof. The PARTIES enter into this Agreement and Release freely and
of their own volition.
IN WITNESS WHEREOF, the PARTIES have hereunto set their hand this 21st day
of September 1995.
9/21/95 /s/ Xxxxxx X. Xxxxxxxx
Date XXXXXX X. XXXXXXXX
STATE OF MINNESOTA )
) ss:
COUNTY OF HENNEPIN )
I /s/ Xxxxxx X. Xxxxxx , a Notary Public, do hereby certify that Xxxxxx
X. Xxxxxxxx, personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that he signed and delivered the said instrument as his free
and voluntary act, for the uses and purposes therein set forth.
Given under my hand and official seal this 21 day of September 1995.
/s/ Xxxxxx X. Xxxxxx
NOTARY PUBLIC
My Commission Expires:
1/31/00
XXXXXXX INVESTMENTS, INC.
Date: 9/25/95 By /s/ Xxxxxxx X. Xxxxxx
Title Director
STATE OF MINNESOTA )
)ss:
COUNTY OF HENNEPIN )
Before me, a notary public for and within the county of Hennepin, State of
Minnesota, this 25th day of September 1995, personally appeared Xxxxxxx X.
Xxxxxx , to me known, and, who after being first duly sworn deposed and stated
that _(s)he is the Director of XXXXXXX INVESTMENTS, INC., and that (s)he is duly
authorized by XXXXXXX INVESTMENTS, INC., to execute and acknowledge the
foregoing Agreement and Release and that said Director did acknowledge to me
that _(s)he executed the same as his own free act and deed on behalf of XXXXXXX
INVESTMENTS, INC.
Given under my hand and official seal this 25th day of September 1995.
/s/ Xxxxxx X. Xxxxxx
NOTARY PUBLIC
My Commission Expires:
1/31/00
Date
