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EXHIBIT 10.36
SEVERANCE AND RELEASE AGREEMENT
This Severance and Release Agreement (the "Agreement") by and between MTI
Technology Corporation ("MTI" or "the Company") and Xxxxxx Xxxxx ("Xxxxx")
documents the terms and conditions of Xxxxx'x termination from the Company,
effective September 22, 2000.
RECITALS
On or about September 28, 1998, Xxxxx commenced employment with MTI,
and is presently in the position of Senior Vice President of Product Development
and Support.
On or about September 20, 2000, MTI and Xxxxx mutually agreed to
terminate Xxxxx'x employment, effective September 22, 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 Xxxxx only those
severance benefits described in the paragraphs that follow in exchange for
Xxxxx'x release of all claims against the Company. Xxxxx accepted this offer.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals listed above, and the
mutual promises contained in this Agreement, Xxxxx and the Company agree,
covenant, and represent as follows:
1. SEVERANCE PAYMENT.
After the Effective Date of this Agreement, Xxxxx shall receive a
severance payment from the Company in the total gross amount of $132,500.00 (the
"Severance Payment"), to be paid bi-weekly in thirteen equal payments of
$10,192.31 ("Installment Payments") beginning on MTI's first payroll date
following the Effective Date of this Agreement. Xxxxx understands and agrees
that MTI will deduct from the Installment Payments all applicable taxes, social
security and other standard authorized amounts. Xxxxx acknowledges that, but for
entering into this Agreement, he would not be entitled to a Severance Payment in
this amount.
2. TERMINATION OF EMPLOYMENT.
x. Xxxxx and the Company agree, covenant and represent that Xxxxx'x
employment relationship with the Company shall terminate effective September 22,
2000 (the "Termination Date"). As of the Termination Date, MTI shall pay to
Xxxxx (i) all accrued but unpaid salary as the Termination Date in the total
gross amount of $5,096.16 and (ii) all unused vacation pay accrued up to and
including September 22, 2000 in the amount of $20,601.21 (collectively, the
"Termination Payment"). The total gross amount
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of the Termination Payment is $25,697.37. MTI shall withhold from the
Termination Payment all applicable payroll taxes, including federal and state
income taxes, as well as other authorized deductions.
b. As of the Termination Date, MTI and Xxxxx agree that Xxxxx 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").
x. Xxxxx acknowledges that, as of October 1, 2000, he may be eligible
to obtain continuing coverage under MTI's group medical, vision, dental, and
life insurance plans pursuant to the provisions of the Consolidated Omnibus
Reconciliation Act and its implementing regulations ("COBRA"). Xxxxx will
receive under separate cover all required documentation and election forms so
that Consultant obtains continued group health insurance coverage pursuant to
COBRA. MTI acknowledges and agrees that, from October 1, 2000 until April 30,
2001, MTI will pay the premium payment for any COBRA continuation coverage that
Xxxxx elects to obtain. MTI further acknowledges and agrees that, from October
1, 2000 to April 30, 2001, MTI will reimburse Xxxxx for medical, vision, and
dental expenses incurred by Xxxxx that are not covered by Xxxxx'x COBRA
continuation coverage but that would be covered under MTI's existent Executive
Medical Plan. In no event shall MTI be liable for, or required to pay premiums
for any COBRA continuation coverage or other medical coverage that Xxxxx may
elect or be eligible to obtain after April 30, 2001.
d. Subject to the approval of MTI's Board of Directors' Compensation
Committee, MTI agrees that Xxxxx'x Option Agreements shall remain in full force
and effect during the term of the Consulting Agreement. Xxxxx understands and
agrees that his right to exercise these shares shall be in accordance with the
terms and conditions his Option Agreements with the MTI and the MTI Technology
Corporation 1996 Stock Incentive Plan, as amended (the "Stock Incentive Plan").
x. Xxxxx and MTI agree, covenant and represent that Xxxxx shall not be
eligible for, or entitled to, any benefits of employment other than those
specifically identified in this Agreement.
x. Xxxxx agrees, covenants and represents that he shall cooperate with
MTI in the orderly transfer of his responsibilities to other MTI employees.
Xxxxx 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.
3. RELEASE.
a. In exchange for the Settlement Payment in the total gross amount of
$132,500.00, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxx for himself and for his heirs,
assigns, executors,
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administrators, agents and successors, past and present (collectively, the
"Xxxxx'x Affiliates"), hereby fully and without limitation releases, covenants
not to xxx, and forever discharges the Company and its subsidiaries, parent
companies, divisions, affiliated corporations, affiliated partnerships,
trustees, directors, officers, shareholders, partners, agents, employees,
consultants, insurance carriers, attorneys, heirs, assigns, executors and
administrators, predecessors and successors, past and present (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 Xxxxx or Xxxxx'x
Affiliates now have, or may ever have, against the Company or any of the other
MTI Releasees for any acts or omissions by the Company or any of the other MTI
Releasees occurring prior to the Effective Date of this Agreement. Without
limiting the generality of the foregoing, this Release applies to any Claims
that Xxxxx or Xxxxx'x Affiliates now have, or may ever have, against the Company
or any of the other MTI Releasees that arise out of, or are in any manner
related to: (i) Xxxxx'x employment by the Company or any of the other MTI
Releasees; (ii) the termination of Xxxxx'x employment with the Company 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, Xxxxx
specifically and expressly releases any Claims against the Company and the other
MTI Releasees 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 state anti-discrimination laws
including, but not limited to, the California Fair Employment and Housing Act;
the federal Age Discrimination In Employment Act; Title VII of the Civil Rights
Act of 1964; the Americans With Disabilities Act; the National Labor Relations
Act; the Fair Labor Standards 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. Xxxxx 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. Xxxxx 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.
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4. WARRANTIES AND REPRESENTATIONS.
Xxxxx 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."
Xxxxx hereby waives and relinquishes all rights and benefits that 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. Xxxxx represents and warrants that he has the authority to enter into
this Agreement on his behalf individually and to bind all persons and entities
claiming through him.
5. OLDER WORKER'S BENEFIT PROTECTION ACT.
a. 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
("ADEA") unless the waiver is knowing and voluntary. Pursuant to the terms of
the OWBPA, Employee acknowledges and agrees that Employee has executed this
Agreement voluntarily, and with full knowledge of its consequences.
b. In addition, Employee hereby acknowledges and agrees that: (a) this
Agreement has been written in a manner that is calculated to be understood, and
is understood, by Employee; (b) the release provisions of this Agreement apply
to any rights Employee may have under the ADEA, including the right to file a
lawsuit against the Company for age discrimination; (c) the release provisions
of this Agreement do not apply to any rights or claims Employee may have under
the ADEA that arise after the date Employee executes this Agreement; (d) the
Company does not have a preexisting duty to pay the severance payment identified
in this Agreement; (e) Employee has the right to consult with an attorney prior
to executing this Agreement; (f) Employee shall have a period of 21 days in
which to consider the terms of this Agreement prior to its execution; and (g)
Employee shall have a period of seven days after execution of this Agreement in
which to revoke this Agreement. Employee further understands that this Agreement
shall not become effective until expiration of this seven-day period (the
"Effective Date").
6. NON-ADMISSION OF LIABILITY.
Xxxxx agrees, covenants and represents that this Agreement shall
constitute a compromise of, and full accord and satisfaction of, doubtful and
disputed claims. Xxxxx further agrees, covenants and represents that this
Agreement shall not be treated as an admission of liability by the Company, at
any time or for any purpose, and may not be used in any other proceeding, except
a proceeding to enforce or interpret the terms of this Agreement.
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7. CONFIRMATION OF PAYMENT OF WAGES.
Xxxxx acknowledges that he has been paid all wages due and owing to
him as of the Effective Date of this Agreement including all commissions,
bonuses, and accrued but unused vacation pay.
8. NON-DISCLOSURE AND NON-DISPARAGEMENT.
x. Xxxxx agrees, covenants, and represents that the facts relating to
the existence of this Agreement, the negotiations leading to the execution of
this Agreement, and the terms of this Agreement shall be held in confidence, and
shall not be disclosed, communicated, offered into evidence in any legal
proceedings or divulged to any person, other than those who must perform tasks
to effectuate this Agreement, without first obtaining the Company's advance
written consent to each disclosure.
x. Xxxxx 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 the Company's business interests or
reputation.
c. Without limiting the generality of the foregoing, Xxxxx agrees,
covenants, and represents that he will not respond to or in any way participate
in or contribute to any public discussion, notice, or other publicity
concerning, or in any way relating to his employment with the Company or the
terms of this Agreement, except to the extent required by law.
9. TRADE SECRETS AND PROPRIETARY INFORMATION.
a. The Company and Xxxxx acknowledge that, in performing the terms and
conditions of his employment, Xxxxx has both directly and indirectly gained
access to information about the Company and its operations, including, but not
limited to, its modes and methods of conducting its business and producing and
marketing its products, its Xxxxx, customer, vendor and referral source lists,
its trade secrets, its copyrighted and non-copyrighted or non-protected computer
software programs, its techniques of operation, its financial structure, and its
weakness, if any ("Confidential Information").
b. The Company and Xxxxx acknowledge and agree that all Proprietary
Information shall be deemed to be highly confidential, shall constitute the
Company's trade secrets, and shall remain the sole property of the Company.
Xxxxx agrees not to in any way communicate, reveal or divulge any Proprietary
Information to any person or entity not employed by the Company, unless the
President and Chief Executive Officer of the Company has given his advance,
written approval to such communication. Even if authorized, in no event shall
Proprietary Information be communicated, revealed or divulged by Xxxxx to any
person or entity who is not a Company Xxxxx, if Xxxxx could reasonably foresee
that such communication would adversely affect the Company's business.
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x. Xxxxx agrees, covenants and represents that, concurrently with his
execution of this Agreement, he shall deliver to the Company all Proprietary
Information, and other materials and documentation relating to the Company
whether or not of a confidential nature, belonging to the Company, including all
copies of such materials which Xxxxx possesses or over which Xxxxx may exercise
control.
10. ARBITRATION.
All disputes between Xxxxx (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 Xxxxx'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. 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. The parties specifically agree that the exclusive
venue of such arbitration shall be Orange County, California.
11. 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 Xxxxx and the Company.
12. 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.
13. CHOICE OF LAW.
This Agreement is made and entered into in the State of California and
shall in all respects be interpreted and enforced pursuant to the laws of the
State of California, without regard to or application of any of California's
conflict of laws rules.
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14. INTEGRATION.
This Agreement; the Consulting Agreement attached as Exhibit "A;"
Xxxxx'x Option Agreements with the Company; MTI's Stock Incentive Plan; 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 both parties.
15. 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
release provisions of Sections 3 and 4 of this Agreement. If a court of
competent jurisdiction finds the release provisions of Section 3 or 4 of this
Agreement to be unenforceable or invalid, then this Agreement shall become null
and void, and Xxxxx shall repay any and all settlement payments made by the
Company pursuant to this Agreement within a reasonable period of time not to
exceed 30 days. If a court of competent jurisdiction finds any provision other
than the release provisions of Section 3 and 4, or part thereof, to be invalid
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.
The undersigned have read the foregoing Agreement and accept and agree to the
provisions contained therein, and hereby execute it, knowingly and voluntarily,
and with full understanding of its consequences.
Dated: September ___, 2000 XXXXXX XXXXX
/s/
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Dated: September ___, 2000 MTI TECHNOLOGY CORPORATION
By: /s/
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Its:
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