Exhibit 10.21
Severance Agreement
This Severance Agreement (the "Severance Agreement) dated August 17, 1998
between First Priority Group, Inc., a New York corporation with offices at 00
Xxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Company") and XXXXXXX
XXXXXXX, an individual residing at 00 Xxxxxxxx Xxxx Xxxxx, Xxx Xxxx, XX. 00000
(hereinafter referred to as the "Executive").
W I T N E S S E T H
WHEREAS, the Company and the Executive wish not to renew the employment
agreement of the Executive; and
WHEREAS, the Company agrees to make severance payments to the Executive;
and
WHEREAS, the Company wishes to limit the sale of the Executive's holdings
in the common stock of the Company; and
WHEREAS, the Executive agrees to accept the severance payment; NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Effective December 31, 2000, the Executive's employment with the Company
shall terminate (the "Termination Date"). While the Company has no established
policy with regard to severance and the Executive acknowledges that the payment
of any severance is at the Company's discretion, the Company will, on the terms
and conditions as set forth herein, provide the Executive with total payments of
One Hundred Thousand Dollars ($100,000) (the "Severance Payment") due and
payable quarterly in equal installments of Twelve Thousand and Five Hundred
Dollars ($12,500) (the "Quarterly Severance Payment"), subject to normal payroll
withholdings,
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commencing on March 31, 1999, with additional payments due and payable on June
30, 1999, September 30, 1999, December 31, 1999, March 31, 2000, June 30, 2000,
September 30, 2000, and December 31, 2000.
Additionally, the Company agrees to maintain the Executive's present health
insurance through December 31, 1998, and to the extent that his stock options
remain exercisable, the Executive shall have the right to exercise all stock
options previously granted to him through the Termination Date and such
additional period of time as provided for in each stock option agreement
following the termination of employment.
2. During the period commencing on the date hereof and ending on December
31, 2000 (the "Severance Period"), the Executive shall have no obligation to
report to work and have no defined employment duties and/or responsibilities.
During the Severance Period, the Executive agrees that he will make himself
available, upon reasonable notice to the Executive, from time to time as the
Company reasonably requests, to permit employees, agents or advisors of the
Company to consult with the Executive on business matters.
The Company agrees to unconditionally make The Severance Payment
contemplated herein subject only to Paragraphs 4 and 10 of this Severance
Agreement and Paragraph 7 of the Employment Agreement, to the extent that such
restricted business activity is related to automotive products and/or services.
The Severance Payment will be paid irrespective of whether the Executive has
accepted employment with another company.
3. Effective on the date hereof, the Company and the Executive agree to the
termination of the Employment Agreement dated January 18, 1996, as amended (the
"Employment Agreement") with all rights and obligations of both parties
terminating on the date hereof, except for Paragraph 7 of the Employment
Agreement, which shall survive the termination of the Employment Agreement.
Additionally, the Executive agrees to resign from the Board of Directors and as
an officer of the Company and any of its subsidiaries on the date hereof. Such
resignation from the Board of Directors of the Company shall be for "without
cause".
4. The Executive confirms that the Severance Payment constitutes good and
valuable consideration. In consideration of the Severance Payment, the Executive
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hereby agrees that following the date hereof, after expiration of the
Consideration Period and the Recision Period, he shall execute a release
substantially in the form as attached as Exhibit A (the "Release"). Execution of
this Release shall be a condition precedent to the Executive receiving any
portion of the Severance Payment set forth herein.
5. The Company agrees from the date hereof not to make any disparaging
statements concerning the Executive. The Executive also agrees not to make any
disparaging statements concerning the Company or any of its officers, directors,
employees or any of the Company's affiliated companies or their officers,
directors and employees.
6. The Release provides for the waiver by the Executive of his/her rights
or claims under the Age Discrimination in Employment Act of 1967, as amended
("ADEA"), and the waiver of these rights or claims are in exchange for
consideration that was not due the Executive by law and/or contract.
7. The Executive will not at any time (i) testify or give evidence in any
forum concerning the Executive's employment with the Company, unless the
Executive is: (i) required by law to do so, or (ii) requested to do so in
writing by an authorized official of the Company.
8. The Executive agrees not sell or transfer any of his holdings, or those
held jointly with another, in the common stock of the Company ("Common Stock"),
presently held or acquired after the date hereof, through December 31, 2000
except as set forth below:
(a) For the period commencing on the date hereof through December 31, 2000,
but no earlier than January 1, 1999, for any twelve (12) month period, the
Executive may not sell: (i) more than 35,000 shares of Common Stock, or (ii)
more than the number of shares of Common Stock having an aggregate value, on the
date of sale, of One Hundred Twenty-five Thousand Dollars ($125,000), whichever
is greater.
(b) To the extent that Xxxxx Xxxxxx is able to sell a portion of his
holdings in the Common Stock, the Executive shall be notified and permitted to
sell his holdings to the same purchaser to the extent that Xxxxx Xxxxxx, the
Executive and all other sellers sharing such sale rights, shall sell their
Common Stock on an equal pro rata basis.
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(c) To the extent that the Executive transfers shares of Common Stock to
the Company in lieu of payment of the exercise price for the exercise of stock
options held by the Executive.
(d) To the extent that all shareholders of the Company are offered an
opportunity to sell, transfer or exchange their shares of Common Stock.
(e) As permitted by the Board of Directors of the Company.
(f) To the extent that the Executive transfers shares of Common Stock in a
private sale, as long as the transferee shall be bound by the same restrictions
of transfer as set forth above.
(g) Nothwithstanding the above, the Executive shall be able to sell to
Xxxxxx X. Xxxxxx Common Stock valued at $100,000 within sixty (60) days of the
date hereof, which sale shall not affect the limitation in Subparagraph 8(a).
For the period commencing on the date hereof through December 31, 2000,
the Executive agrees to deliver all stock certificates representing ownership in
the Common Stock, including those shares held in street name or issued pursuant
to the exercise of a stock option, to the Company's counsel so that a
restrictive legend may be place upon the certificate in substantially the form
as set forth below
(A) for one certificate of 35,000 shares of Common Stock:
The shares represented by this certificate shall be
restricted from transfer pursuant to the Agreement dated
August 17, 1998 between the Company and Xxxxxxx Xxxxxxx (the
"Agreement") which restriction shall expire on December 31,
1998. Such restriction shall not be removed without an
opinion of counsel of the Company that such restriction has
lapsed or is permitted pursuant to this Agreement.
(B) for all other certificates of Common Stock:
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The shares represented by this certificate shall be
restricted from transfer pursuant to the Agreement dated
August 17, 1998 between the Company and Xxxxxxx Xxxxxxx (the
"Agreement") which restriction shall expire on December 31,
2000. Such restriction shall not be removed without an
opinion of counsel of the Company that such restriction has
lapsed or is permitted pursuant to this Agreement.
Following the placement of the restrictive legend upon the certificate, the
certificate shall be returned to the previous holder.
9. The Executive agrees to return forthwith to the Company all Company
property, if any, in the Executive's possession, including but not limited to,
any and all account records, checks, credit cards, papers, presentations, plans,
documents, files, price lists, product information, drawings, financial
statements, notes, whatsoever, including all photocopies thereof, at the time of
executing this Agreement.
10. The Executive agrees that for the period in which the Executive is
receiving the Severance Payment and for one year thereafter, the Executive
agrees not to engage in or participate in any business activity, including, but
not limited to, acting as a director, officer, employee, agent, independent
contractor, partner, consultant, licensor or licensee, franchiser or franchisee,
proprietor, syndicate member, or shareholder that operates in any business of
the Company, or its subsidiaries, or in any business that was planned by the
Company or its subsidiaries prior to the Termination Date, to the extent such
business is related to automotive products and/or services.
11. It is hereby irrevocably agreed that all actions, suits or proceedings
between or among the parties hereto, or any of them, arising out of, in
connection with or relating to this Agreement shall be exclusively heard and
determined in, and the parties do hereby irrevocably submit to the exclusive
jurisdiction of, the Supreme Court of the State of New York for Nassau County or
the United States District Court for the
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Xxxxxxx Xxxxxxxx xx Xxx Xxxx. The parties also agree that a final judgment in
any such action, suit or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. The parties hereby unconditionally waive any objection which any of them
may now or hereafter have to the venue of any such action, suit or proceeding
brought in any of the aforesaid courts, and waive any claim that any such
action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
12. It is mutually understood and agreed that in the event of any breach of
this Severance Agreement by the Company or the Executive, either party shall be
entitled to equitable relief by way of injunction or otherwise, in addition to
money damages that the aggrieved party may be entitled to recover. In the event
that either party to this Agreement shall commence any action against the other
and such action results in a final judgement being rendered by a court of
competent jurisdiction, the prevailing party shall have their legal fees and
disbursements necessary for the prosecution or defense of such action paid by
the non-prevailing party.
13. Any notice, request, or other communication given hereunder shall be in
writing and if given by the Executive to the Company shall be sent by certified
or registered mail, postage prepaid, addressed to the Company and if given by
the Company to the Executive, shall be sent by certified or registered mail,
postage prepaid, addressed to the Executive. In each instance, the proper
mailing address shall be to: (i) the Company, at 00 Xxxx Xxxxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxx, with a copy to Xxxxxxxx X.
Xxxxx, Esq., Xxxxx & Xxxxxx, P.C., 0 Xxxxxx Xxxxx, Xxx Xxxxx, Xxx Xxxx 00000,
and (ii) the Executive, at 00 Xxxxxxxx Xxxx Xxxxx, Xxx Xxxx, XX. 00000, with a
copy to Xxxx X. Xxxxxxxxx, Esq., Xxxxxxxxxx & Xxxxx, 00 Xxxxxxxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
14. This Agreement sets forth the entire agreement between the Executive
and the Company concerning the above subject matter and supersedes any and all
other agreements between us, whether written or oral, on the subject matter. The
terms of this Agreement may not be changed or modified except by an instrument
in writing duly signed by the Executive and by an authorized representative of
the Company.
15. This Agreement shall be governed by and construed under the laws of the
State of New York.
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16. If any portion of this Agreement is held invalid or unenforceable by a
court of competent jurisdiction or any governmental agency, that portion only
shall be deemed deleted as though it had never been included herein, but the
remainder of this Agreement shall remain in full force and effect. However, if
the Release portion of the Agreement is held invalid or unenforceable by a court
of competent jurisdiction or any governmental agency, any payments accepted and
retained by the Executive under this Agreement shall be returned immediately to
the Company.
Agreed and Accepted:
First Priority Group, Inc. Xxxxxxx Xxxxxxx
By: By:
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Name: Date:
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Title:
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Date:
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Exhibit A
CONSULT WITH A LAWYER BEFORE SIGNING THIS AGREEMENT. BY SIGNING THIS AGREEMENT
YOU GIVE UP AND WAIVE IMPORTANT LEGAL RIGHTS.
This Severance Agreement (the "Severance Agreement) dated August 17, 1998
between First Priority Group, Inc., a New York corporation with offices at 00
Xxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Company") and XXXXXXX
XXXXXXX, an individual residing at 00 Xxxxxxxx Xxxx Xxxxx, Xxx Xxxx, XX. 00000
(hereinafter referred to as the "Executive").
1. This Exhibit A (the "Release") shall be considered an integral part of
the Severance Agreement and hereby incorporated by reference. The Executive
confirms that the Severance Payment constitutes good and valuable consideration.
In consideration of the Severance Payment, the Executive hereby releases the
Company, any subsidiaries or affiliated companies, and their respective past and
present officers, directors, agents and employees ("Released Parties") from all
claims (other than claims for payments provided for under this Release), causes
of action or liabilities of any kind and nature whatsoever that may have arisen
up through the date of this Release, including but not limited to all claims,
causes of action or liabilities arising from the Executive's employment with the
Company; Worker's Compensation or disability claims under state of local law;
claims of discrimination under Title VII of the Civil Rights Act of 1991,
including the Equal Employment Opportunity Act of 1972; the Age Discrimination
in Employment Act of 1967, as amended ("ADEA"); the Americans with Disabilities
Act of 1990; the National Labor Relations Act, as amended; the Employee
Retirement Income Security Act of 1974, as amended; the Worker Adjustment and
Retraining Notification Act of 1988; 42 U.S.C. ss.1981; and state or local law,
rules or regulations, claims relating to wages and hours under the Fair Labor
Standards Act, and regulations or equivalent state or local wage and hour laws
and regulations, and claims under any express or implied contract, tortious
conduct, libel, slander or defamation.
The Executive intends to waive and release any rights the Executive may have
under these and other laws, but the Executive does not intend to, nor is the
Executive waiving any rights or claims that may arise under the Age
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Discrimination in Employment Act of 1967, as amended ("ADEA") after the date
that the Executive signs this
Agreement
2. This Release provides for the waiver by the Executive of his/her rights
or claims under the ADEA, and the waiver of these rights or claims are in
exchange for consideration that was not due the Executive by law and/or
contract.
3. The Executive represents that the Executive has not filed any complaints
or charges against the Released Parties with any local, state or federal agency
or court, and that Executive will not at any time hereafter file any complaints
or charges arising from the Executive's termination, nor, has the Executive or
will the Executive contact any local, state or federal agency regarding the
activities of the Company in operating its business. Should any such agency or
court assume jurisdiction of any such complaint or charge, or commence any
investigation or inquiry concerning the business practices of the Company, the
Executive will immediately request such agency or court not to exercise such
jurisdiction and will in no event participate personally or otherwise in any
such proceeding, nor voluntarily respond to any agency inquiries without being
compelled to respond under applicable law.
4. The Executive was given a copy of this Release on __________________.
The Executive has had an opportunity to consult with an attorney before signing
this Release and was given a period of at least twenty-one (21) days, or
______________ to consider this Release (the "Consideration Period").
The Executive has seven (7) days to revoke this Release after the Executive
signs it. This Release will not become effective or enforceable until seven (7)
days after the Company has received the Executive's signed copy of this Release.
Please write the following in the space provided below, if it is true and
correct:
The Executive has read this Release and the Executive understands all of
its terms. The Executive hereby enters into and signs this Release knowingly and
voluntarily, with full knowledge of what it means.
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Agreed and Accepted:
First Priority Group, Inc. Xxxxxxx Xxxxxxx
By: By:
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Name: Date:
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Title:
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Date:
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Exhibit 21
List of Subsidiaries
Subsidiary State of Incorporation
National Fleet Service, Inc. New York State
Driver's Shield, Inc. New York
FPG Acquisition Corp. Arizona
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