SEPARATION AGREEMENT AND RELEASE
THIS SEPARATION AGREEMENT AND RELEASE (the "Agreement") is made and
entered into as of October 7, 1996, by and between KENETECH CORPORATION and CNF
INDUSTRIES, INC. (together with their affiliated companies, the "Company'), both
Delaware corporations, and XXXX X. XXXXXX (the "Employee"), who was previously
employed by the Company.
RECITALS
A. The Employee's employment with the Company terminated on or about
September 15, 1996.
B. The Employee acknowledges that he received full salary, vacation pay
and benefits payments from the Company in accordance with the
Company's regular payroll practices prior to termination.
C. The Employee desires to compromise, settle and release fully and
finally all outstanding matters between the Employee and the Company,
including all matters relating to the Employee's employment, his
separation from the Company and the termination of his employment.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, and for other good and valuable consideration, the Company and
the Employee agree as follows:
1. Separation Date. The Company and the Employee agree that the Employee's
employment by the Company was terminated effective on or about September 15,
1996 (the "Separation Date"). The Employee understands and agrees that,
effective as of the Separation Date, he was no longer authorized to incur any
expenses, obligations or liabilities on behalf of the Company and he
acknowledges that he has been reimbursed for all expenses incurred by him prior
to such date.
2. Resignation. The execution of this Agreement shall confirm the
Employee's resignation as an officer and employee of the Company effective as of
the Separation Date.
3. Terms of Separation. In consideration of the agreements by the Employee
provided herein, including, without limitation, the releases by the Employee in
Paragraph 4 below and cancellation of the Promissory Note from the Company to
the Employee dated December 1, 1994 ("Promissory Note") as provided in Paragraph
15(d) below, the Company agrees as follows:
(a) In full satisfaction of any claims by the Employee in connection with
his employment or the termination of his employment, including, but
not limited to, any claims for compensation, bonus payments, fringe
benefits, disability benefits, ownership rights, severance benefits,
change in control benefits, out-placement services, relocation
expenses, payments of principal and interest under the Promissory
Note, life insurance premiums or coverage, membership fees and
options, the Company shall, concurrently with the Company's receipt of
the Waiver of Revocation described in Paragraph 11 below, (i) pay to
the Employee a lump sum amount equal to $445,000 less all applicable
deductions, and (ii) transfer to the Employee as owner/payor the
Company's life insurance policies naming the Employee as the insured
issued by Security-Connecticut Life Insurance Company, Policy Nos.
0008-47934E and 0008-41548R, free of loans, and (iii) deliver to the
Employee restricted stock certificates as contemplated by Paragraph
15(f) below.
(b) The Employee has ceased participation in all employee benefit plans of
the Company effective as of the Separation Date, and the Company shall
not be liable for any payments to or on behalf of the Employee in
respect of any fringe benefits, except that the Employee shall
continue to be covered by the Company's health and group disability
and life insurance plan until October 31, 1996. The foregoing health
coverage shall not be in lieu of any continued health care coverage to
which the Employee or his dependents would otherwise, at the
Employee's expense, be entitled in accordance with the requirements of
Code Section 4980B by reason of termination of his employment.
(c) The Employee's employment will be deemed terminated effective on the
Separation Date.
(d) The Company will deduct and withhold, from the compensation payable to
the Employee under this Agreement, any and all Federal, State and
local income and employment withholding taxes and any other amounts
required to be deducted or withheld by the Company under the
applicable statute or regulation.
4. Mutual Releases.
(a) Release By The Employee. Except as to any claims arising out of rights
provided under this Agreement, in consideration for the agreements set
forth herein, the Employee hereby irrevocably and unconditionally
releases, acquits and forever discharges for himself and his heirs,
executors, administrators, agents, successors and assigns, CNF
Industries, Inc., KENETECH Corporation and any related entity and
their stockholders, predecessors, successors, assigns, agents,
directors, officers, employees, representatives, attorneys, divisions,
and subsidiaries, and all persons acting by, through, under or in
concert with any of them (collectively, the "Company Releasees"), or
any of them, from any and all charges, complaints, claims, assertions
of claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorneys' fees
and costs actually incurred) of any nature whatsoever, known or
unknown, suspected or unsuspected, arising directly or indirectly out
of any interactions between the Employee or his heirs, executors,
administrators, agents, successors or assigns, and the Company
Releasees from the beginning of time to the present, including but not
limited to any matter arising out of the Employee's employment by the
Company, his separation from employment with the Company, the proposed
purchase of CNF Industries, Inc. or any affiliate by Gemma Inc. or any
affiliate, or the termination of the Employee's employment, which the
Employee or his heirs, executors, administrators, agents, successors
or assigns, now has, or ever claimed to have, or could claim against
each or any of the Company Releasees, including, without limitation,
any of the following: claims in equity or law for wrongful discharge,
and personal injury claims, claims under federal, state or local laws
prohibiting discrimination on account of age, national origin, race,
sex, disability, religion and other protected classifications, or
claims under the Civil Rights Acts of 1866 and 1871, as amended, Title
VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act
of 1991, the Age Discrimination in Employment Act of 1967, as amended,
the Employee Retirement Income Security Act of 1974, as amended, the
Americans with Disabilities Act of 1990, the Family Medical and Leave
Act, the California Fair Employment and Housing Act or any comparable
law of any other State (collectively, the "Employee Claims"). The
Employee hereby agrees to forego any right to file any charges or
complaints with any governmental agencies or any legal action against
the Company Releasees under any of the laws referenced in this
paragraph or with respect to any of the Employee Claims.
Notwithstanding the foregoing, the release by the Employee in this
paragraph shall not limit the right of the Employee to seek to enforce
the provisions of this Agreement, including without limitation the
provisions of Paragraph 8 below.
(b) Release By The Company. Except as to any claims arising out of rights
provided under this Agreement, in consideration for the agreements set
forth herein, the Company hereby irrevocably and unconditionally
releases, acquits and forever discharges for itself and its agents,
successors and assigns, the Employee and his successors and assigns
(collectively, the "Employee Releasees"), or any of them, from any and
all charges, complaints, claims, assertions of claims, liabilities,
obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and
expenses (including attorneys' fees and costs actually incurred) of
any nature whatsoever, known or unknown, suspected or unsuspected,
arising directly or indirectly out of any interactions between the
Company and the Employee Releasees from the beginning of time to the
present, arising out of the Employee's employment by the Company, his
separation from employment with the Company, or the termination of the
Employee's employment, which the Company now has, or ever claimed to
have, or could claim against each or any of the Employee Releasees
(collectively, the "Company Claims"). The Company hereby agrees to
forego any right to file any charges or complaints with any
governmental agencies or any legal action against the Employee
Releasees with respect to any of the Company Claims. Notwithstanding
the foregoing, the release by the Company in this paragraph shall not
limit the right of the Company to seek to enforce the provisions of
this Agreement, including without limitation the provisions of
Paragraph 8 below.
(c) Gemma. The Employee shall not benefit from or promote any action or
legal proceeding of any kind against any of the Company Releasees
arising out of or in connection with, directly or indirectly, Gemma
Inc.'s attempt to purchase CNF Industries, Inc. or any affiliate
thereof, and shall oppose any such action or legal proceeding,
including but not limited to voting against any such action or legal
proceeding in his capacity as an officer or director of Gemma Inc. The
Employee represents and warrants to the Company that the Employee
knows of no plans to initiate any such action or proceeding and that
he does not have a controlling interest in or control Gemma Inc. or
its actions. The Company shall not benefit from or promote any action
or legal proceeding of any kind against the Employee arising out of or
in connection with, directly or indirectly, Gemma Inc.'s attempt to
purchase CNF Industries, Inc. or any affiliate thereof, and shall
oppose any such action or legal proceeding.
(d) Indemnification and Insurance. To the extent permitted by applicable
law, the Company agrees that all rights to indemnification from the
Company existing under the law and under the Company's certificate of
incorporation and by-laws as of the Separation Date, in favor of the
Employee as a director, officer, employee, or agent of the Company
shall survive this Agreement and shall continue in full force and
effect with respect to any liability for any acts or omissions by the
Employee during the period of his employment by the Company. The
Company further agrees that, for so long as it maintains directors'
and officers' liability insurance that covers any former employees of
CNF Industries, Inc. or KENETECH Corporation whose employment
terminated in September 1996 or earlier, it shall include the Employee
among the insured former employees; provided, however, that this
Agreement shall not be construed or implied as an obligation to
continue to maintain directors' and officers' liability insurance for
active or former employees for any period of time. The Employee shall
hold the Company harmless from any liability arising out of his tax
situation and any taxes, penalties, or other assessments that may
hereafter be asserted on account of any payments or other compensation
hereunder, over and above taxes withheld and paid in a timely manner
by the Company.
5. Waiver of Unknown Claims. The Employee acknowledges that he is aware
that he may hereafter discover claims or facts different from or in addition to
those he now knows or believes to be true with respect to the matters herein
released, and except as to any claims arising out of the rights provided under
this Agreement, he agrees that the releases set forth above shall be and remain
in effect in all respects a complete general release as to the matters released
and all claims relative thereto which may exist or may heretofore have existed,
notwithstanding any such different or additional facts. The Employee
acknowledges that he has considered the possibility that he may not fully know
the number or magnitude of all of the claims which he has or may have against
the Company and the Company Releasees and, except as set forth in this Agreement
and Paragraph 8 below, intends to assume the risk that he is releasing unknown
claims. The Employee acknowledges that he has been informed of Section 1542 of
the Civil Code of the State of California and, except as set forth in this
Agreement and Paragraph 8 below, he does hereby expressly waive and relinquish
all rights and benefits which he has or may have under such Section or under any
comparable law of any other State, which reads 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."
The Employee understands and acknowledges the significance and consequences
of such specific waiver of Section 1542 and, except as set forth in this
Agreement and Paragraph 8 below, hereby assumes full responsibility for any
injuries, damages or losses that he may incur as the result of such waiver.
6. Confidentiality and Non-disclosure Agreements.
(a) The Employee acknowledges that any confidentiality, proprietary or
ownership rights or nondisclosure agreement(s) in favor of the Company
or the Company Releasees which he may have entered into in connection
with his employment (the "Nondisclosure Agreement(s)") by the Company,
are understood to survive, and do survive, the termination of his
employment and this Agreement, and accordingly nothing in this
Agreement shall be construed as terminating, limiting or otherwise
affecting any such Nondisclosure Agreement(s) or the Employee's
obligations thereunder.
(b) The Employee agrees that, except to the extent compelled by law or
legal process or except to the extent he is required to disclose to
governmental authorities in connection with any inquiry, audit or
assessment relating to the taxation of any payments provided for
herein or except in any litigation or arbitration proceeding between
the Company and the Employee as provided herein (in which case the
Employee will use his best efforts to ensure that such information is
maintained as confidential by the persons to whom he is compelled or
required to disclose such information), the Employee will not: (i)
disclose or communicate confidential information of the Company to any
third party (including governmental agencies and employees and former
employees of the Company); (ii) make use of confidential information
of the Company for his own behalf, or on behalf of any third party;
and (iii) facilitate, assist, persuade or attempt to facilitate,
assist or persuade any third party to commence or prosecute any legal
proceedings against the Company or any Company Releasees. If the
Employee receives, is notified of, or is served with a subpoena,
summons, complaint, order, notice, notice of deposition or any other
legal process or request for information (collectively, "Legal
Process") in connection with any legal or quasi-legal proceeding,
including, but not limited to, any action at law or equity,
arbitration, administrative proceeding or governmental,
self-regulating organization or stock exchange investigation
(collectively, "Litigation"), relating to the performance of his
services as an employee, officer or as a director of the Company, or
which, if complied with by the Employee, might compel or lead to the
disclosure by the Employee of confidential information of the Company,
the Employee shall immediately notify the Company and provide the
Company with a copy of the same.
7. Company Property and Information. The Company and the Employee agree
that the Employee, as of the date of the execution of this Agreement, has
returned to the Company all Company Information (defined below) and files
containing Company Information; credit cards; cardkey passes; door and file
keys; automobiles; apartments; computer access codes, computer discs, magnetic
media; software; and all other physical property which the Employee received in
connection with his employment. The term "Company Information" as used in this
Agreement means confidential or proprietary business or financial information of
the Company. The Employee further represents and warrants that he has not,
except in the ordinary course of business and in accordance with Company
policies and procedures, destroyed or discarded any documents or information.
8. Confidentiality of This Agreement.
(a) The Employee and the Company mutually represent and agree that, except
to the extent required by law, they will keep the terms, and the fact,
of this Agreement completely confidential and they will not hereafter
disclose any information concerning this Agreement to any person;
provided, however, that the Employee may disclose the terms, and the
fact, of this Agreement to his immediate family and either party may
disclose the terms hereof to his or its legal and tax advisors if such
persons agree to keep such information confidential and not disclose
it to others, except as provided in Paragraph 6(b) above; provided,
however, that either party may make any disclosures that may be
required or appropriate under applicable laws or regulations.
(b) The provisions set forth in subparagraph (a) above are material terms
of this Agreement, and a breach of any of those provisions shall
constitute a material breach of this Agreement.
9. Consideration. The Company and the Employee mutually acknowledge that
neither is required to enter into this Agreement, and the Employee acknowledges
that the consideration to be received by him under this Agreement is adequate
and that the promises and agreements made by the Company in this Agreement are
in consideration of the Employee's agreement to provide the releases set forth
in Paragraph 4 above.
10. Receipt of This Agreement. The Employee acknowledges that he has been
given twenty-one (21) days to consider the terms of this Agreement.
11. Revocability. This Agreement is revocable by the Employee for seven
(7) days after it is signed by him. This Agreement shall not be effective or
enforceable until the period for revocation has expired and the Employee has
delivered to the Company an original executed version of the Waiver of
Revocation in the form attached hereto as Exhibit A.
12. Arbitration. In the event there shall arise any questions or dispute
between the Company and the Employee with respect to the provisions of this
Agreement or its interpretation, such dispute shall be settled exclusively by
arbitration in San Francisco, California, in accordance with the commercial
rules then in effect of the American Arbitration Association. Any award so
rendered shall be final and binding upon the Company and the Employee and in
lieu of any right to a jury trial. In the event that injunctive relief shall
become necessary under this Agreement, both the Company and the Employee shall
have the right to seek provisional remedies prior to an ultimate resolution by
arbitration.
13. Voluntary Agreement. The Employee represents and agrees that he has
been advised by the Company of his right to discuss all aspects of this
Agreement with his attorneys, that he has voluntarily chosen whether to avail
himself of this right, that he has carefully read and fully understands all of
the provisions of this Agreement, and that he is voluntarily entering into this
Agreement.
14. Notices. Any notice given to either party to this Agreement shall be
in writing and shall be deemed to have been given when delivered personally or
sent by certified or registered mail, postage prepaid, return receipt requested,
duly addressed to the party concerned at the address indicated below or to such
changed address as such party may subsequently give such notice of.
If to the Company: KENETECH Corporation
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
If to the Employee: Xxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
15. General Provisions.
(a) The Employee represents and acknowledges that in executing this
Agreement, he does not rely and has not relied upon any
representation, inducement agreement or statement not set forth herein
made by any of the Company Releasees or by any of the Company
Releasees' agents, representatives or attorneys with regard to the
subject matter of this Agreement or otherwise.
(b) The provisions of this Agreement are severable, and if any part of it
is found to be unenforceable, the other provisions shall remain fully
valid and enforceable. This Agreement shall survive the termination of
any arrangements contained herein.
(c) The Company and the Employee mutually agree that neither may assign
this Agreement, or any rights or obligations under this Agreement, to
any person or entity without the express prior written approval of the
other.
(d) This Agreement sets forth the entire agreement between the Company and
the Employee and supersedes any and all prior agreements or
understandings between the Company and the Employee pertaining to the
subject matter hereof, including the Employment Agreement dated
December 1, 1994 between the Company and the Employee ("Employment
Agreement"), the Promissory Note and any other agreements relating to
the Employee's employment. Except as specifically set forth in
Paragraph 6 hereof, the Employment Agreement shall be null and void as
of the Separation Date. The Promissory Note shall be null and void as
of the Separation Date. This Agreement shall inure to the benefit of
and be binding upon the successors in interest and assigns of each
party except as otherwise provided herein.
(e) The Employee and the Company agree that the payments and other
consideration paid by the Company to the Employee under this
Agreement, and the cancellation by the Employee of the Company's debt
to the Employee under this Agreement, represent the parties'
bargained-for compromise of their dispute regarding the consideration
(if any) which is due the Employee as a result of the termination of
his existing Employment Agreement under the circumstances which led to
that termination. The parties agree that this compromise provides fair
consideration to each of them.
(f) Nothing herein shall amend or alter the Restricted Stock Purchase
Agreement between the Employee and KENETECH Corporation dated as of
December 6, 1990 or the grants of stock options by KENETECH
Corporation to the Employee dated December 28, 1990 and September 23,
1993, except that (A) all of the unvested or restricted Common Stock
the Employee holds (to the extent not otherwise vested) shall
automatically vest as of the Separation Date and (B) each of the
outstanding stock options (to the extent not otherwise exercisable)
shall automatically accelerate as of the Separation Date so that each
such option is immediately exercisable for the total number of shares
purchasable thereunder in accordance with the applicable stock option
agreement.
(g) The effect, intent and construction of this Agreement shall be
governed by the laws of the State of California, without giving effect
to the conflict of laws rules thereof.
(h) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
IN WITNESS WHEREOF, the Company and the Employee have duly executed this
Agreement as of the date first set forth above.
KENETECH CORPORATION
By_________________________ ___________________________
Name: Xxxx X. Xxxxxx XXXX X. XXXXXX
Title: Chief Executive Officer Date Signed: October __, 1996
Date Signed: October __, 1996
EXHIBIT A
October __, 1996
The Board of Directors
KENETECH Corporation
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Gentlemen:
On October __, 1996, I executed a Separation Agreement and Mutual Release
(the "Agreement") between KENETECH Corporation ("KENETECH") and me, effective as
of October __, 1996. I acknowledge that I was advised by KENETECH that I had the
right to consult with an attorney, and I have voluntarily chosen whether to
avail myself of that right. I also acknowledge that I was advised by KENETECH
that I had the right to revoke the Agreement at any time during the seven-day
period following the date of my execution of the Agreement, which revocation
period expired on October __, 1996.
By providing this letter, I represent and warrant to KENETECH that I have
not revoked the Agreement within the seven-day revocation period that expired on
October __, 1996, and that I will not attempt to revoke the Agreement at any
time in the future. I acknowledge that I am providing this letter to induce
KENETECH to make a payment to me in accordance with the provisions of Paragraph
3(a) of the Agreement. I also acknowledge that I have no basis upon which to
claim that the Agreement is invalid for any reason.
Very truly yours,
