Exhibit 10(a)
SEVERANCE AGREEMENT
This Severance Agreement (this "Agreement"), effective August 15, 1996,
confirms and memorializes the agreement reached and entered into on that date
between Xxxx X. Xxxxxx ("Xxxxxx") and Choices Entertainment Corporation (the
"Corporation") (Xxxxxx and the Corporation are sometimes collectively
referred to herein as the "Parties").
RECITALS
WHEREAS, Xxxxxx is presently employed by the Corporation and is a
director and Chairman of the Board of the Corporation; and
WHEREAS, Xxxxxx and the Corporation are parties to a letter agreement
dated March 31, 1992, as amended by letter agreement dated February 24, 1994
(together, the "Old Severance Agreement"), providing for the payment of
certain benefits to Xxxxxx if Xxxxxx'x employment is terminated after a
change in control of the Corporation; and
WHEREAS, Xxxxxx desires to resign voluntarily from all positions and
from employment with the Corporation and any of its affiliates and
subsidiaries, while remaining a director and Chairman of the Board until the
next meeting of shareholders at which directors are elected, and to settle
all claims arising out of his employment with the Corporation and/or its
related and subsidiary companies and the separation from that employment,
including releasing the Corporation from any claims or rights that he has or
may have under the Old Severance Agreement, which is intended to be
terminated hereby; and
WHEREAS, the Corporation desires that, following Xxxxxx'x aforesaid
resignation of employment, upon the terms and conditions herein set forth,
Xxxxxx thereafter serve as a consultant to the Corporation and Xxxxxx desires
to serve in that capacity, upon the terms and conditions of a consulting
agreement, as herein provided; and
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
1. CORPORATION. For and in consideration of the representations,
covenants, promises, agreements and acknowledgements made by Xxxxxx contained
herein, and his performance thereof, the sufficiency of which is hereby
acknowledged:
(a) For a period of eleven (11) months from the date first set
forth above, Xxxxxx shall serve as a consultant to the Corporation, upon the
terms and conditions set forth in the consulting agreement attached hereto
(the "Consulting Agreement"), which has been entered into by the Parties
contemporaneously herewith.
(b) Except with respect to those options held by Xxxxxx to purchase
291,667 shares of Choices common stock, at an exercise price of $1.25 per
share, which are cancelled and terminated hereby, all options held by Xxxxxx
as of the date first set forth above to acquire shares of Choices common
stock shall remain in full force and effect, and the Corporation shall use
its best efforts to maintain the effective registration under the Securities
Act of 1933, as amended (the "Securities Act"), on Form S-8 (or on such other
form as may be appropriate), of all shares underlying such options, for so
long as such options are outstanding.
(c) The Corporation hereby accepts Xxxxxx'x voluntary resignation
(contained in Paragraph 2 below) from all positions and from employment with
the Corporation and any of its affiliates and subsidiaries, except that
Xxxxxx shall remain a director and Chairman of the Board of the Corporation
until the next meeting of shareholders at which directors are elected.
2. XXXXXX COVENANTS. For and in consideration of the above-referenced
payments and the covenants, promises, agreements and acknowledgements of the
Corporation contained herein, and its performance thereof, the sufficiency of
which is hereby acknowledged:
(a) Xxxxxx hereby voluntary resigns
from all positions and employment with the Corporation and any of its
affiliates and subsidiaries, effective as of the date first set forth above,
provided, however, that he shall continue as a director and Chairman of the
Board of the Corporation until the next meeting of shareholders at which
directors are elected.
(b) Xxxxxx shall not file, pursue or prosecute any suit, charge,
complaint, action or claim of any nature whatsoever arising out of his
employment with the Corporation and/or its related and/or subsidiary
companies, or his separation from such employment. Xxxxxx further, for
himself and his estate, agents, attorneys, successors, heirs, executors,
administrators, and assigns, irrevocably and unconditionally releases and
discharges the Corporation and its subsidiary corporations, and their
affiliates, directors, officers, employees, representatives, agents,
attorneys, predecessors, successors, and assigns (hereinafter collectively
referred to as the "Corporation Releasees") from any and all rights, demands,
actions, causes of actions, suits, debts, charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages and
expenses (including attorneys fees and costs actually incurred) of any nature
whatsoever, in law or
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equity, whether known or unknown, which he ever had, now has, or may have
had, against the Corporation Releasees since the beginning of time to the
date of execution of this Agreement, including, but not limited to, any and
all rights, claims, obligations or liabilities arising under the Old
Severance Agreement, and any and all tort or contract claims and any and all
claims arising under Federal, state or local statutes, ordinances,
resolutions, regulations or constitutional provisions prohibiting
discrimination on the basis of race, color, religion, sex, age, national
origin and/or physical or mental disability; provided, however, that such
release and discharge do not apply to (i) claims, demands or causes of action
for breach of the Consulting Agreement, (ii) any of the undertakings or other
provisions contained in the Consulting Agreement or in this Agreement, (iii)
any rights of indemnification under the Corporation's by-laws, including but
not limited to those rights of indemnification relating to the existing
litigation in the Los Angeles County Superior Court entitled Xxxx X. Xxxxx,
et al. v. Choices Entertainment Corporation, et al.
Without limiting the foregoing, Xxxxxx specifically waives and releases any
and all claims and rights which he has or may have against the Corporation
Releasees, or any of them, based upon or arising under Title VII of the Civil
Rights Act of 1964, the Americans With Disabilities Act, 42 U.S.C. Sections
1981 and 1983, and applicable state and local laws, each as amended. Xxxxxx
hereby further agrees that if any such claim referenced herein is filed,
pursued or otherwise prosecuted by him, individually or collectively, or by
persons or entities acting by or through him, individually or collectively,
Xxxxxx waives his rights to relief from such claim, including the right to
attorney's fees, costs and any and all other relief, whether legal or
equitable, sought in such claim, and agrees to indemnify and hold the
Corporation Releasees harmless from such claim, including attorney's fees and
costs.
(c) Xxxxxx consents to the cancellation and termination, effective
immediately, of those options held by him on the date first set forth above
to purchase 291,667 shares of Choices common stock, at an exercise price of
$1.25 per share, which options are hereby rendered null and void.
(d) Xxxxxx acknowledges that he shall have seven (7) days following his
execution of this Agreement in which to rescind or withdraw his waiver of
claims of age discrimination stated above and that, in the event he exercises
such right of rescission and/or withdrawal of waiver, this Agreement and the
Consulting Agreement shall become null and void and of no further effect.
3. REPRESENTATIONS. The Parties represent and certify that they have
carefully read and fully understand all of the provisions of this Agreement,
that they have had ample and adequate opportunity to discuss thoroughly all
aspects of this Agreement with legal counsel of their own choosing, that they
are voluntarily entering
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into this Agreement and that no representations have been made other than
those set forth explicitly herein. Xxxxxx specifically acknowledges: (i)
that he has been provided a reasonable time up to and including twenty-one
(21) calendar days in which to consider the terms of this Agreement, even if
executed prior to the expiration of that period, and (ii) that the law firm
of Earp, Cohn, Leone & Xxxxxxx, A Professional Corporation, including any
attorney in that firm with whom he has communicated, has solely represented
the Corporation in connection with this Agreement and the Consulting
Agreement and has not jointly represented Xxxxxx and the Corporation, and
that such law firm has advised Xxxxxx he should obtain legal counsel in
connection with this Agreement and the Consulting Agreement.
4. INTERPRETATION. The Parties understand and agree that this
Agreement shall in all respects be interpreted, enforced and governed under
the laws of the State of Delaware, without regard to principles of conflicts
of laws, and that the language of this Agreement shall in all respects be
interpreted as a whole, according to its fair meaning, and not strictly for
or against either of the Parties, regardless of which is the drafter of this
Agreement.
5. ENTIRE AGREEMENT AND MODIFICATION. The Parties further agree that
this Agreement and the Consulting Agreement set forth the entire agreement
among the Parties with respect to the subject matter hereof and thereof and
fully supersede any and all prior agreements or understandings between them,
including, without limitation, the Old Severance Agreement, which is
terminated hereby and rendered null and void. This Agreement may be amended
or superseded only by a subsequent writing, executed by the Parties.
6. ASSIGNMENT. This Agreement shall not be assignable by Xxxxxx, but
shall be binding on Xxxxxx and his estate, agents, attorneys, successors,
heirs, executors, administrators, insurers and assigns, and shall be binding
on and inure to the benefit of the Corporation Releasees and their estates,
agents, attorneys, successors, heirs, executors, administrators, insurers and
assigns.
7. LITIGATION. Except as may otherwise be provided to the contrary
elsewhere in this Agreement, in the event of litigation arising under this
Agreement, the Parties agree that the prevailing Party shall be entitled to
recover from the non-prevailing Party
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its reasonable attorneys' fees and expenses incurred in connection with such
litigation at all levels.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Parties
have executed this Agreement on this 25th day of October, 1996, as of the
date first set forth above.
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
CHOICES ENTERTAINMENT CORPORATION
By /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx, Chief
Executive Officer
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