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EXHIBIT 10.35
SEVERANCE AND RELEASE AGREEMENT
This Severance Agreement (the "Agreement") by and between MTI
Technology Corporation ("MTI" or "the Company") and Xxxx Xxxx ("Xxxx") documents
the terms and conditions of Xxxx'x termination from the Company, effective July
10, 2000 (the "Effective Date").
RECITALS
On or about February 6, 1995, Xxxx commenced employment with
MTI as the Company's Corporate Controller and is currently the Company's Chief
Financial Officer.
On or about July 7, 2000, MTI and Xxxx mutually agreed to
terminate Xxxx'x employment, effective July 10, 2000. MTI does not have a
uniform policy or practice of granting particular severance benefits to its
employees or executives. However, MTI offered to pay to Xxxx only those
severance benefits described in the paragraphs that follow in exchange for
Xxxx'x release of all claims against the Company. Xxxx accepted this offer.
NOW, THEREFORE, in consideration of the recitals listed above,
and the mutual promises contained in this Agreement, Xxxx and the Company agree,
covenant, and represent as follows:
AGREEMENT
1. The Parties' Responsibilities
a. Within 24 (twenty-four) hours after the execution of this
Agreement by Xxxx, MTI shall pay to Xxxx a one-time lump sum payment equivalent
to (i) one year of his current base salary and (ii) one years' car allowance of
$1,200 per month, (collectively, the "Severance Payment"). The gross total
amount of the Severance Payment is $274,400. MTI shall withhold from the
Severance Payment all applicable payroll taxes, including federal and state
income taxes, as well as other authorized deductions.
b. Upon the execution of this Agreement by both parties, MTI
shall also pay to Xxxx (i) all accrued but unpaid salary as of July 10, 2000, in
the amount of $12,200 and (ii) all unused vacation pay accrued up to and
including July 10, 2000 in the amount of $19,390.00 (collectively, the
"Supplemental Payment"). The gross total amount of the Supplemental Payment is
$31,590.00 MTI shall withhold from the Supplemental Payment all applicable
payroll taxes, including federal and state income taxes, as well as other
authorized deductions.
c. Effective July 10, 2000, MTI and Xxxx agree that Xxxx shall
be retained by MTI as a consultant pursuant to the terms and conditions of the
Consulting Agreement attached as Exhibit "A" (the Consulting Agreement").
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x. Xxxx acknowledges that, as of August 1, 2000, he may be
eligible to obtain continuing coverage under MTI's group medical, vision and
dental plans pursuant to the provisions of the Consolidated Omnibus
Reconciliation Act and its implementing regulations ("COBRA"). MTI acknowledges
and agrees that, from August 1, 2000 through August 31, 2001, MTI will pay the
premium payment for any COBRA continuation coverage that Xxxx elects to obtain.
In no event shall MTI be liable for, or required to pay premiums for any COBRA
continuation coverage Xxxx may elect or be eligible to obtain after August 31,
2001. MTI further acknowledges and agrees that, from August 1, 2000 to August
31, 2001, MTI will reimburse Xxxx for medical, vision, and dental expenses
incurred by Xxxx that are not covered by Xxxx'x COBRA continuation coverage but
that would be covered under MTI's existent Executive Medical Plan.
e. Subject to the approval of MTI's Board of Director's
Compensation Committee, MTI agrees that Xxxx'x Option Agreements granted
pursuant to the MTI Technology Corporation 1992 and 1996 Stock Incentive Plans,
as amended (the "Stock Incentive Plans"), shall continue and remain in full
force and effect will continue to vest during the term of the Consulting
Agreement. Xxxx understands and agrees that his right to exercise these shares
shall be in accordance with the terms and conditions of the Stock Incentive
Plan.
x. Xxxx and MTI agree, covenant and represent that Xxxx shall
not be eligible for, or entitled to, any benefits of employment other than those
specifically identified in this Agreement.
x. Xxxx agrees, covenants and represents that he shall
cooperate with MTI in the orderly transfer of his responsibilities to other MTI
employees. Xxxx further agrees, covenants and represents that he shall cooperate
in good faith with MTI in the defense of any action that has been or will be
brought against MTI that arises out of, or relates in any way to his employment
with MTI. MTI agrees, covenants and represents that it shall indemnify and hold
Xxxx harmless to the extent required by law for all that Xxxx necessarily
expends or loses in direct consequence of the discharge of his duties under this
paragraph 1(g).
2. Release
a. In consideration of the promises specified in this
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxx, for himself and his heirs,
assigns, executors, administrators, and agents, past and present (collectively,
the "Xxxx Affiliates"), hereby fully and without limitation releases, covenants
not to xxx, and forever discharges MTI and its respective subsidiaries,
divisions, affiliated corporations, affiliated partnerships, parents, trustees,
directors, officers, shareholders, partners, agents, employees, representatives,
consultants, attorneys, heirs, assigns, executors and administrators,
predecessors and successors, past
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and present (collectively, the "MTI Releasees"), both individually and
collectively, from any and all rights, claims, demands, liabilities, actions and
causes of action whether in law or in equity, suits, damages, losses, workers'
compensation claims, attorneys' fees, costs, and expenses, of whatever nature
whatsoever, known or unknown, fixed or contingent, suspected or unsuspected
("Claims"), that Xxxx or the Xxxx Affiliates now have, or may ever have, against
any of the MTI Releasees that arise out of, or are in any way relate to: (i)
Xxxx'x employment by MTI or any of the other MTI Releasees; (ii) the termination
of Xxxx'x employment by MTI or any of the other MTI Releasees; and (iii) any
transactions, occurrences, acts or omissions by MTI or any of the other MTI
Releasees occurring prior to the Effective Date of this Agreement.
b. Without limiting the generality of the foregoing, Xxxx
specifically and expressly releases any Claims occurring prior to the Effective
Date of this Agreement arising out of or related to violations of any federal or
state employment discrimination law, including the California Fair Employment
and Housing Act; Title VII of the Civil Rights Act of 1964; the Americans With
Disabilities Act; the National Labor Relations Act; the Equal Pay Act; the
Employee Retirement Income Security Act of 1974; as well as Claims arising out
of or related to violations of the provisions of the California Labor Code;
state and federal wage and hour laws; breach of contract; fraud;
misrepresentation; common counts; unfair competition; unfair business practices;
negligence; defamation; infliction of emotional distress; invasion of privacy;
assault; battery; false imprisonment; wrongful termination; and any other state
or federal law, rule, or regulation.
x. Xxxx agrees, covenants, and represents that he has not
commenced, and that he shall never commence or pursue, a claim for workers'
compensation benefits of any kind relating to or resulting from his employment
with MTI or any of the other MTI Releasees. Xxxx further agrees, covenants, and
represents that, in the event that he has filed or does file a claim for
workers' compensation benefits, MTI may, but is not required to, present this
Agreement to the Workers' Compensation Appeals Board for approval as a
compromise and release.
3. Warranties and Representations
Xxxx acknowledges that he is aware of and familiar with the
provisions of Section 1542 of the California Civil Code, 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."
Xxxx hereby waives and relinquishes all rights and benefits
which he may have under Section 1542 of the California Civil Code, or the law of
any other state or jurisdiction, or common law principle, to the same or similar
effect. Xxxx represents and warrants that he has the authority to enter into
this Agreement and to bind all persons and entities claiming through him.
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4. Confidentiality and Non-Disparagement
x. Xxxx agrees, covenants and represents that the facts
relating to the existence of this Agreement, the negotiations leading to the
execution of this Agreement, the terms of this Agreement and the amounts of the
Severance Payment and the Supplemental Payment shall be held in confidence, and
shall not be disclosed, communicated or divulged, to any person other than those
who must perform tasks to effectuate this Agreement, without first obtaining
MTI's written consent to each disclosure.
x. Xxxx further agrees, covenants and represents that he shall
not take any action or make any comments that actually or potentially disparage,
disrupt, damage, impair, or otherwise interfere with MTI's business interests or
reputation.
5. Trade Secrets
Xxxx acknowledges that he executed a Proprietary Information
Agreement and that he shall continue to be bound by this Proprietary Information
Agreement following the termination of his employment with MTI. A copy of the
Proprietary Information Agreement is attached to this Agreement as Exhibit "B."
6. Non-Admission of Liability
Xxxx agrees, covenants and represents that this Agreement
shall not be treated as an admission of liability by MTI, at any time, for any
purpose, and that this Agreement shall not be admissible in any proceeding
between the parties except a proceeding relating to a breach of its provisions
after execution, or a proceeding to obtain approval of this Agreement as a
compromise and release as provided in Paragraph 2(c) of this Agreement.
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7. Older Worker's Benefit Protection Act.
This Agreement is subject to the terms of the Older Workers
Benefit Protection Act of 1990 (the "OWBPA"). The OWBPA provides that an
individual cannot waive a right or claim under the Age Discrimination in
Employment Act unless the waiver is knowing and voluntary. Pursuant to the terms
of the OWBPA, Xxxx acknowledges and agrees that he has executed this Agreement
voluntarily, and with full knowledge of its consequences. In addition, Xxxx
hereby acknowledges and agrees that: (a) this Agreement has been written in a
manner that is calculated to be understood, and is understood, by Xxxx; (b) the
release provisions of this Agreement apply to any rights Xxxx may have under the
Age Discrimination in Employment Act ("ADEA"), including the rights to file a
claim for age discrimination against the MTI Releasees with the Equal Employment
Opportunity Commission, and to file a lawsuit against the MTI Releasees for age
discrimination; (c) the release provisions of this Agreement do not apply to any
rights or claims Xxxx may have under the ADEA that arise after the date he
executes this Agreement; (d) MTI does not have a preexisting duty to pay Xxxx
the Xxxxxxxxx Payment identified in paragraphs 1(a) of this Agreement; (e) Xxxx
has been advised to consult with an attorney prior to executing this Agreement;
and (f) Xxxx has a period of at least twenty-one days to review this Agreement
prior to executing it and that Xxxx has voluntarily chosen to execute this
Agreement prior to the execution of this 21-day period; and (g) Xxxx has a
period of at least seven days after execution of this Agreement in which to
revoke this Agreement and that this Agreement shall not become effective until
expiration of this seven-day period (the "Effective Date").
8. Arbitration of Disputes
All disputes between Xxxx (and his attorneys, successors, and
assigns) and MTI (and its affiliates, shareholders, directors, officers,
employees, agents, successors, attorneys, and assigns) relating in any manner
whatsoever to Xxxx'x employment with, or the termination of his employment from,
MTI ("Arbitrable Claims") including, without limitation, all disputes relating
to the validity, interpretation, or enforcement of this Agreement, shall be
resolved exclusively by arbitration in Orange County, California, by the
Judicial Arbitration & Mediation Services, Inc. (the "JAMS"). Such arbitration
shall be conducted in accordance with the then-existing arbitration rules of
JAMS, with the cost of such arbitration to be borne equally by the parties. The
parties to this Agreement, and all who claim thereunder, shall be (i)
conclusively bound by the arbitrator's decision or award, which shall not be
subject to appeal; and (ii) have the right to have any decision or award
rendered in accordance with this provision entered as a judgment in a court in
the State of California or any other court having jurisdiction. The arbitrator
shall have the authority to award or grant legal, equitable, and declaratory
relief. The parties hereby waive any rights they may have to trial by jury. The
Federal Arbitration Act will govern the interpretation and enforcement of this
Section pertaining to arbitration, unless it is found inapplicable in which case
California law shall control.
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9. Successors and Assigns
This Agreement shall be binding upon and shall inure to the
benefit of the respective heirs, assigns, executors, administrators, successors,
subsidiaries, divisions and affiliated corporations and partnerships, past and
present, and trustees, directors, officers, shareholders, partners, agents and
employees, past and present, of Xxxx and MTI.
10. Ambiguities
This Agreement has been reviewed by the parties. The parties
have had a full opportunity to negotiate the terms and conditions of this
Agreement. Accordingly, the parties expressly waive any common-law or statutory
rule of construction that ambiguities should be construed against the drafter of
this Agreement, and agree, covenant, and represent that the language in all
parts of this Agreement shall be in all cases construed as a whole, according to
its fair meaning.
11. Choice of Law
This Agreement has been negotiated and executed in the State
of California and is to be performed in Orange County, California. This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of California, including all matters of construction, validity,
performance, and enforcement, without regard to California's conflict of laws
rules.
12. Integration
This Agreement; the Consulting Agreement attached as Exhibit
"A;" Xxxx'x Option Agreements with the Company; MTI's Stock Incentive Plans; and
the Proprietary Information Agreement attached as Exhibit "B" constitute a
single, integrated written contract expressing the entire agreement of the
parties. There is no other agreement, written or oral, express or implied,
between the parties with respect to the subject matter hereof. This Agreement
may not be orally modified. This Agreement may only be modified in a written
instrument signed by all parties.
13. Severability
The parties to this Agreement agree, covenant and represent
that each and every provision of this Agreement shall be deemed to be
contractual, and that they shall not be treated as mere recitals at any time or
for any purpose. Therefore, the parties further agree, covenant and represent
that each and every provision of this Agreement shall be considered severable,
except for the for the Release provisions of Sections 2 and 3 of this Agreement.
If a court of competent jurisdiction finds the release provisions of Sections 2
or 3 of this Agreement to be unenforceable or invalid, then this Agreement shall
become null and void, and the Severance Payment paid pursuant to paragraph 1
shall be returned to MTI within a reasonable period of time. If a court of
competent jurisdiction finds any provision other than the release provisions of
paragraph 2 or 3, or part thereof, to be invalid
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or unenforceable for any reason, that provision, or part thereof, shall remain
in force and effect to the extent allowed by law, and all of the remaining
provisions of this Agreement shall remain in full force and effect and
enforceable.
14. Execution of Counterparts
This Agreement may be executed in counterparts, and if so
executed and delivered, all of the counterparts together shall constitute one
and the same Agreement.
15. Captions
The captions and section numbers in this Agreement are
inserted for the readers' convenience, and in no way define, limit, construe or
describe the scope or intent of the provisions of this Agreement.
16. Miscellaneous Provisions
a. The parties represent that they have read this Agreement
and fully understand all of its terms; that they have conferred with their
attorneys, or have knowingly and voluntarily chosen not to confer with their
attorneys about this Agreement; that they have executed this Agreement without
coercion or duress of any kind; and that they understand any rights that they
have or may have and sign this Agreement with full knowledge of any such rights.
b. The parties acknowledge that no representations, statements
or promises made by the other party, or by their respective agents or attorneys,
have been relied on in entering into this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
which consists of 7 pages, on the dates indicated below.
Dated: XXXX XXXX
/s/
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Dated: MTI TECHNOLOGY CORPORATION
By: /s/
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