TERMINATION AGREEMENT
AGREEMENT, dated as of July 26, 2001, between J. XXXXXXX XXXXXX (the
"Executive") and EQUIDYNE CORPORATION, a Delaware corporation (the "Company").
RECITALS
A. The Executive and the Company are pates to an Employment Agreement,
dated December 1, 1999 (the "Employment Agreement"), which provides the terms
and conditions of the Executive's employment with the Company.
B. The Executive has submitted his voluntary resignation from the Company
effective July 31, 2001 (the "Termination Date"), and the Company has accepted
the resignation effective on the Termination Date.
C. The Company and the Executive mutually desire to provide for the
provisions of the termination of the Executive's employment, as set forth
herein.
1. Termination. The Executive and the Company agree that as of the close of
business on July 31, 2001, the Executive's employment with the Company and its
subsidiary Equidyne Systems, Inc. ("ESI") shall terminate and he shall cease to
serve as an executive officer of the Company and as an officer and/or director
of ESI. Upon the Termination Date, the Employment Agreement shall terminate in
its entirety, except to the extent specifically provided herein. Following the
execution of this Agreement, the expiration of the Revocation Period set forth
in Section 2.1 below without the Executive having exercised his rights to revoke
this Agreement, this Agreement will become effective and be the sole agreement
governing the rights, relationship, obligations and duties of the Company and
the Executive to each other. The Executive has separately resigned as a director
of the Company effective on July 31, 2001.
2. Benefits.
2.1 Revocation Period. Provided that the Executive does not timely revoke
his consent to this Agreement within seven calendar days after his execution of
this Agreement in accordance with the provisions of the Older Worker Benefit
Protection Act, as amended, (the "Revocation Period"), in consideration for the
Executive's acceptance and execution of this Agreement, the Company shall,
solely in accordance with the terms of this Agreement grant the Executive
additional consideration as provided for in this Section 2.
2.2 Stock Options. (a) As of the date hereof, the Executive holds vested
options (the "Options") for the purchase of an aggregate of 600,000 shares (the
"Option Shares") of the Company's Common Stock, $.01 par value (the "Common
Stock"), at an exercise price of $1.12 per share. By reason of the Executive's
termination of employment, these Options would expire three months after the
Termination Date. However, the Company and the Executive agree that the
expiration date of the Options shall be extended to twelve months after the
Termination Date, provided that during such twelve month period, the Executive
may not sell,
gift, hypothecate or otherwise transfer any Option Shares after exercise thereof
except by operation of law (a "Transfer"), except as follows:
Three-Month Period Number of Shares Transferable
------------------ -----------------------------
First -0-
Second 150,000 shares
Third 300,000 shares, less number of shares
transferred shares in Second Period
Fourth 450,000 shares, less number of shares
transferred in Second and Third Periods
(b) In addition, the provisions of Section 5.03 of the Employment Agreement
are incorporated herein and trade part of this Agreement solely for the purpose
of this Section 2.2, provided, however, for purposes of this Agreement the
restrictive period shall be twelve months from the Termination Date, and that
upon a breach by the Executive of his covenant under Section 5.03 of the
Employment Agreement the Company shall have the right to terminate all
unexercised Options and/or to effect a rescission of any Options exercised by
the Executive during such twelve month period from the Termination Date.
2.3 Loan Forgiveness. Subject to the provisions of this Agreement, the
Company will forgive all $100,000.00 of the outstanding balance of $100,000.00
on the interest free loan previously made to the Executive by the Company. The
Executive acknowledges that he will be responsible for all federal, state and
other taxes payable by reason of the loan forgiveness, and that he will
indemnify the Company for all costs and expenses (including reasonable
attorneys' fees) incurred by the Company by reason of the claims against the
Company relating to or arising from the loan forgiveness.
3. Representations.
3.1 Full Payment. The Executive acknowledges that except for the benefits
being provided for in Section 2 hereof, neither the Company nor ESI has any
further obligations, financially or otherwise, to the Executive arising out of
his employment with the Company or ESI or under the Employment Agreement.
3.2 COBRA. The Executive provides notice that he and his family have
declined their tights to continued health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act by reason of his employment with
the Company.
3.3 Return of Documents. The Executive represents that on or prior to the
Termination Date he delivered to the Company all documents and property in his
possession or control, including any confidential information, which was the
property of the Company or ESI.
4. Covenants.
4.1 Non-Disclosure. The Executive agrees that both the existence and the
substance of this Agreement are strictly confidential and will not be disclosed
or discussed by him, without the prior written permission of the Company, to or
with any person, whomsoever, with the exception only of disclosure required by
court order and disclosure to his attorney, his tax consultant, and/or the duly
designated taxing authorities of the government of the United States of America
and/or the government of the State of California (the "Disclosees"). The
Executive further agrees if questioned by any person whomsoever, other than the
Disclosees, concerning the existence or substance of this Agreement and/or any
part of this Agreement, he will, at the absolute maximum, respond only that, "I
have agreed not to discuss the matter."
4.2 Non-Disparagement. The Executive acknowledges that the business
reputation of the Company, ESI and their affiliates is essential to them.
Therefore, the Executive agrees that he will not ever, for any reason or at any
time, make any disparaging statement or disclose any negative information to any
person about the Company or ESI, or any of their respective present or former
employees, present or former officers, present or former directors, business or
operations.
4.3 Non-Solicitation. The Executive agrees that for a period of one year
from the Termination Date, he will not, either directly or indirectly, on his
own behalf or in the service of others, disrupt, damage, impair or interfere
with the business of the Company or ESI whether by way of interfering with or
raiding its officers, employees, agents and/or independent contractors or in any
manner attempting to persuade any such persons to discontinue any of their
relationships with the Company or ESI, without having received the Company's
prior written permission to do so.
4.4 Cooperation. Notwithstanding the foregoing, upon the request of the
Company, the Executive shall frilly cooperate and communicate with management of
the Company regarding matters which had occurred at or affecting the Company
during his employment, including, but not limited to, communications with the
Audit Committee of the Board of Directors and its special counsel.
5. Remedies. In the event that the Executive breaches in any way any of his
representations, warranties or covenants in this Agreement (excluding a breach
subject to Section 2.2(b) hereto), the Executive agrees that the forgiveness of
$100,000.00 of the interest free loan as described in Section 2.3 hereof shall
be immediately revoked and the full balance of that loan shall be immediately
due and payable, together with interest at the prime rate of Citibank NA from
the date of any such breach. Finally, the Executive agrees that notwithstanding
any other provision of this Agreement, he shall be frilly liable to the Company
for any and all damages, including actual attorneys' fees resulting from any
breach by him of this Agreement.
6. Confidentiality. The Executive agrees that he will not disclose to any
third party or use or authorize any third party to use, any information relating
to the business, business plans, trade secrets or other interests of the Company
(including without limitation any such information related to the customers or
clients of the Company) which is confidential and valuable to the Company or any
of its subsidiaries and which is not generally known to the public.
7. Arbitration. The Company and the Executive agree that any claim or
dispute on account of this Agreement, his Employment or the Termination,
including any and all claims relating to the calculation of any sums due under
this Agreement as well as any and all claims for discrimination on the basis of
age, race, sex, national origin, religion, color, marital status, physical
handicap, medical condition, or disability or any other basis whatsoever, shall
be settled solely by final and binding arbitration in accordance with the
Employment Dispute Resolution Rules of the America Arbitration Association to
take place in San Diego, California.
8. Notices. The Company and the Executive agree that any notices under this
Agreement will be given in writing and delivered in person or facsimile
transmission or by a copy being sent by overnight delivery addressed as follows:
to Employee:
J. Xxxxxxx Xxxxxx
00000 Xxx Xxxxxxxxx Xxx
Xxxxx, Xxxxxxxxxx 00000
Facsimile Number
to the Company:
Equidyne Corp.
00000 Xxxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer and Counsel
Facsimile Number (000) 000-0000
with a copy to:
Xxxxxx Xxxx & Priest, LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile Number (000) 000-0000
or to such other address as either party hereto may hereafter duly give to the
other.
9. Consult with Counsel. The Executive agrees that (1) the Company has
recommended that he consult with an attorney of his choke concerning this
Agreement and the consequences of his execution of this Agreement; (ii) he has
had ample time to consult with an attorney, entirely of his own choice,
concerning this Agreement and the consequences of his
execution of this Agreement; and (iii) following his execution of this Agreement
he shall have a period of seven calendar days within which to revoke his consent
to this Agreement, if so advised, by giving notice of his decision to revoke to
the Company as set forth above.
10. Miscellaneous
10.1 Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof, supersedes any prior
agreement (oral or written) between the parties, including the Employment
Agreement except to the extent provided herein. No change, termination or
attempted waiver of any of the provisions hereof shall be binding unless in
writing and signed by the party against whom the same is sought to be enforced.
10.2 Successor and Assigns: Binding Effect. This Agreement will be binding
upon and inure to the benefit of the Company and its successors and assigns, and
the Executive, and his heirs and administrators.
10.3 Waiver and Severability. The waiver by either party of a breach of any
terms or conditions of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by such party. In the event that any one or more
of the provisions of this Agreement shall be declared to be illegal or
unenforceable under any law, rule or regulation of any government having
jurisdiction over the parties hereto, such illegality or unenforceability shall
not affect the validity and enforceability of the other provisions of this
Agreement.
10.4 Heading: Interpretations. The headings and captions used in this
Agreement are for convenience only and shall not be construed in interpreting
this Agreement.
10.5 Governing Law. All matters concerning the validity and interpretation
of and performance under this Agreement shall be governed by The laws of the
State of California without regard to the conflicts of law principles thereof.
10.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which shall constitute a single
document.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
By: /s/ J. Xxxxxxx Xxxxxx
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J. XXXXXXX XXXXXX
EQUIDYNE CORPORATION
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx,
Chief Operating Officer
