EXHIBIT 10.17
CONFIDENTIAL
NEGOTIATED SETTLEMENT AND RELEASE OF ALL CLAIMS
This Confidential Negotiated Settlement and Release of All Claims
("Agreement") is made and entered into between Xxxxxxx X. Xxxxxxxxxx
("Employee") and Imation Corp. ("Imation"). EMPLOYEE UNDERSTANDS THAT EMPLOYEE
CANNOT SIGN THIS AGREEMENT UNTIL AT LEAST TWENTY-ONE (21) DAYS AFTER EMPLOYEE
HAS RECEIVED THIS AGREEMENT, WHICH WAS ON NOVEMBER 23, 1998.
1. WHAT IMATION AGREES TO DO
In return for this Agreement and for Employee's termination from
Imation as described herein and in full and final settlement, compromise, and
release of all of Employee's employment-related claims (as described in section
2 below), but not as earnings used to calculate retirement benefits, Imation
agrees to provide Employee consideration as follows:
A. Imation agrees to pay Employee the amount of Five Hundred Sixty
Two Thousand, Five Hundred and no/100 Dollars ($562,500.00) less
applicable deductions, such as federal, state, local and FICA
payroll tax deductions. Payment processing will begin following
the expiration of fifteen (15) days after Employee signs this
Agreement, so long as Employee does not exercise Employee's right
to rescind this Agreement pursuant to section 3.K. below.
B. Employee will be offered the opportunity to participate in
Imation's Pre-Retirement Leave Program, by voluntarily electing
this status. Employee understands that the duration and terms of
the Pre-Retirement Leave Program are governed by Imation's
Pre-Retirement Leave Policy. If Employee elects Pre-Retirement
Leave, Imation agrees to pay Employee's portion of benefit costs
only for medical and dental insurance coverages for a period of 26
weeks beginning immediately after Employee's termination.
Thereafter, Employee will receive medical and dental insurance
benefits at the same rates and under the same coverages as other
similarly situated employees on Pre-Retirement Leave.
C. In the event that Employee elects continuation of benefits through
COBRA, Imation will cover the full cost of Employee's benefit
coverage, beginning on Employee's termination date as set forth in
paragraph 3.A. below, and ending on the earlier of six (6) months
or until Employee becomes covered by another employer's medical
and dental insurance, whichever comes first.
D. Notwithstanding Section 10 of Imation's 1996 Employee Stock
Incentive Plan, if Employee elects Pre-Retirement Leave from
Imation, all outstanding stock options held by Employee, which are
listed on Exhibit A attached hereto, will become immediately
vested AND MUST BE EXERCISED NO LATER THAN DECEMBER 31, 1999. ALL
OF EMPLOYEE'S OUTSTANDING STOCK OPTIONS WILL EXPIRE ON JANUARY 1,
2000. If Employee elects to retire from Imation, then all stock
options become immediately vested and options remain active
through the full term of the grant as specified in Exhibit A.
E. Imation will continue to pay premiums on Employee's Split Dollar
Life Insurance Policy until Employee turns age 65.
Employee understands and agrees that Imation is under no separate
obligation to make such payments and benefits available to Employee and that
they are offered to Employee solely in exchange for this Agreement, and as an
accommodation to obtain Employee's resignation from Imation. Accrued but unused
vacation pay and personal holidays will be paid separately pursuant to normal
Imation policy.
2. WHAT EMPLOYEE AGREES TO DO
As a condition to receiving the above payments and benefits, Employee agrees as
follows:
A. Employee must return all Imation property currently in Employee's
possession, including, but not limited to, all notes, memoranda,
correspondence, files, notebooks, technical charts or diagrams,
customer lists or information, sales and marketing information,
computer recorded information, software, equipment, materials,
keys and credit cards. Employee acknowledges that this obligation
is continuing and agrees to promptly return to Imation any
subsequently discovered property as described above.
B. Employee also agrees to repay to Imation the amount of any
permanent or temporary advances or other monies due and owing
Imation, and to pay off the remaining balance on any corporate
credit cards. If Employee fails to make such payments as of the
date Employee signs this Agreement, Employee agrees that Imation
may deduct any monies owed from the Agreement payments, if no
other written arrangements are made for repayment by the date this
Agreement is signed.
C. Employee hereby irrevocably and unconditionally releases and
forever discharges Imation from any and all federal, state or
local charges, claims, controversies, causes of action, damages,
costs, attorneys' fees, or liabilities of any nature, both past
and present, known and unknown, including but not limited to
claims arising under federal, state, local, and common laws and
under any regulations of any jurisdiction that in any way relate
to employment and termination of employment existing at any time
up to and including the date of this Agreement, that Employee now
may have, ever have had, or in the future may have against
Imation; and Employee further agrees not to commence suit or file
any administrative claim, based upon any of the foregoing. This
Agreement specifically includes, but is not limited to, ANY CLAIMS
UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT of 1967, THE OLDER
WORKERS BENEFIT PROTECTION ACT OF 1990, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act, any state
or local human rights act, claims for wrongful termination, breach
of contract, and tort claims (for example, defamation, emotional
distress or any tort or negligence-based claim). Employee
expressly acknowledges that this Agreement also is intended to
include in its scope, without limitation, all claims that Employee
does not know of or expect to exist in Employee's favor at the
time Employee signs this Agreement and that this Agreement
contemplates the extinguishment of any such claim or claims except
as expressly provided in this Section. THE EMPLOYEE IS NOT WAIVING
ANY RIGHTS FOR EVENTS ARISING AFTER THE DATE OF THIS AGREEMENT.
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D. The foregoing does not release Employee from compliance with
Employee's Imation Employee Agreement.
E. Employee also agrees that following Employee's termination from
Imation, Employee will not make disparaging remarks about Imation,
will not interfere with Imation's business relationships with its
customers, vendors, or distributors, and for a period of one (1)
year following termination, will not solicit Imation employees,
either on behalf of Employee or any third party, to resign from
Imation to work for Employee or any third party.
F. As further consideration for this Agreement, Employee agrees that
if requested by Imation, Employee will make himself available at
reasonable times to assist and cooperate with Imation in the
litigation of any lawsuits or claims, and agrees to be available
to Imation to testify honestly with regard to such lawsuits or
claims if Employee is determined by Imation to be a material
witness. Similarly, Employee agrees that he will decline to
voluntarily aid, assist, or cooperate with any parties who are
involved in claims or lawsuits by or against Imation, or with
their attorneys or agents; and will notify Imation when and if the
Employee is contacted by other parties or their attorneys or
agents involving claims or lawsuits by or against Imation. It is
understood and intended that nothing in this paragraph shall
prevent Employee from honestly testifying at a legal proceeding in
response to a lawful and properly served subpoena in a proceeding
involving Imation.
G. Employee agrees that Imation shall be entitled to injunctive and
other equitable relief to prevent a breach or threatened breach of
the provisions of this Agreement, without the necessity of proving
actual damages. Such injunctive relief shall be in addition to any
other damages that may be available at law. Employee also
acknowledges that if Imation is required to bring an action to
enforce its rights under this Agreement, it shall be entitled to
recover its attorney's fees and costs associated with such an
action, if Imation prevails.
3. OTHER UNDERSTANDINGS, AGREEMENTS, AND REPRESENTATIONS
A. Employee agrees that Employee's Imation employment will terminate
on December 31, 1998. Except as set forth in Section 1 above,
Employee further understands and agrees that Employee will not be
eligible for and will not receive consideration, severance pay or
benefits under any other group Income Assistance Pay Plan for
which Employee might otherwise have been eligible.
B. Employee understands that the term Imation, as used in this
Agreement, includes: (1) its past, present, and future divisions,
subsidiaries, affiliates successors and assigns, and their
officers, directors, employees, agents, insurers and legal
counsel; (2) any ERISA employee benefit plan sponsored by Imation,
acting as plan administrator, fiduciary or party in interest with
respect to such plan. Employee agrees that this Agreement binds
Employee and also binds Employee's heirs, executors,
administrators, assigns, agents, partners and successors in
interest.
C. Employee agrees that this Agreement and the payment of money and
benefits to Employee by Imation is not an admission by Imation of
any violation of Employee's rights or of any statutory or other
legal obligation.
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D. Employee represents that no right, claim, or cause of action
covered by this Agreement has been assigned or given to someone
else.
E. Employee understands that Employee continues to be covered by
Imation's Officers and Directors Insurance for any action or
inaction that Employee took while an officer of Imation.
F. Employee represents that, at any time in the future, Employee will
not apply for employment with Imation in any capacity, subject to
the provisions of Section 2(F).
G. Employee represents that Employee will keep the terms of this
Agreement strictly confidential, except that Employee may tell
Employee's spouse, legal counsel and tax advisor. In the event
Employee chooses to communicate any information about the
existence of the Agreement or any of its terms to Employee's
spouse, legal counsel and/or accountant or investment advisor,
Employee shall instruct such persons that information about the
existence of the Agreement and its terms are confidential and that
the spouse, legal counsel or accountant is not to disclose,
disseminate or publicize, or cause or permit to be disclosed,
disseminated or publicized, the information to any other party,
entity, person (including any current or former employee of
Imation), company, government agency, publication or judicial
authority. Employee may also disclose information regarding the
Agreement (1) to the extent necessary to report the sum awarded to
appropriate taxing authorities or (2) in response to any subpoena
issued by a state or federal governmental agency or court of
competent jurisdiction; provided, however, that notice of receipt
of such order or subpoena shall be promptly communicated to
Imation by telephone and in writing (Xx. Xxxx X. O'Sell, Imation
Legal Affairs, 0 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000,
telephone 000-000-0000) so that Imation shall have an opportunity
to intervene and assert what rights it has to nondisclosure prior
to any response to such order or subpoena. Any court reviewing a
subpoena should be aware that part of the consideration for the
Agreement is the agreement of Employee not to testify regarding
the existence of the Agreement or any of its terms.
H. This Agreement contains the entire understanding between Employee
and Imation and supersedes all prior agreements and understandings
relating to the subject matter of this Agreement. This Agreement
shall not be modified, amended, or terminated except as provided
in section 3.K. unless such modification, amendment, or
termination is executed in writing by Employee and Imation.
I. Employee agrees that Imation may use this Agreement to secure
withdrawal of any federal, state, or local charge Employee might
have filed or will file, that Employee will sign any document
necessary to obtain the withdrawal of any such charge, and that
Employee waives the right to receive monetary damages or other
legal or equitable relief awarded by any governmental agency
related to any such charge.
J. Employee represents and certifies that Employee: has received a
copy of this Agreement for review and study and has had at least
twenty-one (21) days for study and review before being asked to
sign it; has read this Agreement carefully; has been given a fair
opportunity to discuss and negotiate the terms of this Agreement;
understands its provisions; is and has been advised and encouraged
to consult an attorney; has determined that it is in Employee's
best interest to enter into this Agreement; has not been
influenced to sign this Agreement
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by any statement or representation by Imation not contained in
this Agreement; and enters into this Agreement knowingly and
voluntarily.
K. Employee understands that pursuant to the provisions of Minnesota
Statutes ss 363.031, subd. 2, Employee may rescind this Agreement
by notifying Imation of Employee's desire to do so in a writing
delivered to Imation personally or by certified mail, return
receipt requested, within fifteen (15) calendar days of Employee's
execution of this Agreement. To be effective, such notice of
rescission, if mailed, must be postmarked within the fifteen (15)
day period and addressed as follows:
Xxxx X. O'Sell
Imation Corp.
Legal Affairs
0 Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxxx 0X-00
Xxxxxxx, XX 00000
L. In case any part of this Agreement is held invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability
of the remaining provisions will not be affected in any way, it
being intended that the provisions of this Agreement are
severable, EXCEPT THAT, if paragraph 2 of this Agreement is held
invalid, illegal, or unenforceable, this Agreement is voidable,
and, if Employee seeks to void this Agreement, Employee
understands and agrees that Employee will repay the total amount
of consideration paid to Employee under this Agreement.
M. Any dispute arising between Employee and Imation under this
Agreement will be submitted to final and binding arbitration in
accordance with the rules of the American Arbitration Association.
The Arbitration shall be conducted in St. Xxxx, Minnesota and
shall be final and binding on both parties. The expenses of the
neutral arbitrator(s) and any court reporter shall be equally
divided between Employee and Imation.
N. The agreement will be governed by and construed and interpreted
according to the laws of the State of Minnesota.
ACCEPTED AND AGREED: IMATION CORP.
/s/ XXXXXXX X. XXXXXXXXXX By /s/ XXXXXXX X. XXXXXXX
-------------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxxxxxx Xxxxxxx X. Xxxxxxx
Its President and CEO
Date: December 29, 1998 Date: December 29, 1998
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EXHIBIT A
STOCK OPTIONS
Name of Xxxxx Xxxxx Date # of shares Option Price Expiration Date
------------------ ---------- ----------- ------------ ---------------
Global Share 7/31/96 100 $22.38 7/30/2006
Mega Grant/ 7/31/96 24,000 $22.38 7/30/2006
Key Employee Grant
Mgmt. Option 8/1/96 8,560 $22.90 7/31/2006
(3M Replacement)
Mega Grant/ 8/11/97 18,000 $25.00 8/10/2007
Key Employee Grant
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