EXHIBIT 10.62
TERMINATION AGREEMENT
This Agreement ("Termination Agreement") is dated as of January 1, 2002
and is between Xxxx Xxxxxxxx, an individual residing at 0 Xxxxx Xxxx Xxxxx,
Xxxxxxxx, Xxx Xxxx 00000 ("Executive") and Twin Laboratories Inc. ("Company"),
a Utah corporation with its principal place of business at 000 Xxxxx Xxxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000.
1. Executive and Company are parties to an employment agreement, dated as
of January 1, 2000, attached hereto as Exhibit "A" (the "Employment Agreement").
Except as otherwise set forth herein, Executive and Company agree that the
Employment Agreement and the benefits derived thereunder shall be terminated as
of the date of this Termination Agreement provided however, that Executive and
Company agree the provisions set forth in Sections 3(d), 5, 6, 7, 10(b) and
10(k) of the Employment Agreement, as modified herein, are valid, binding and
enforceable and shall survive the termination of the Employment Agreement.
2. Notwithstanding anything to the contrary set forth in the Employment
Agreement, the period of time during which Executive shall
a) not "compete" in accordance with Section 5 of the Employment
Agreement; shall be for three (3) years commencing as of the date of this
Termination Agreement; and
b) not "solicit" in accordance with Section 6 of the Employment
Agreement; shall be for three (3) years commencing as of the date of this
Termination Agreement.
3. Section 5 of the Employment Agreement is hereby modified and amended
so that Company's payments to Executive of Base Salary shall commence
twelve (12) months from the date of this Termination Agreement (e.g., the first
anniversary of the Termination Agreement) and shall continue for a period of
twenty-four (24) months thereafter.
4. During the term of the non-competition provisions set forth in
Section 5 and of the non-solicitation provisions of Section 6 of the Employment
Agreement (both Sections as modified in paragraph 2 hereof), and provided that
Executive is not in breach of such provisions and of the confidentiality
provisions set forth in Section 7 of the Employment Agreement, Company shall
arrange for the Executive to continue to participate in and receive the
Company's medical, dental and prescription drug insurance benefits to the
extent authorized by the Company's medical insurance plans as in effect from
time to time and on the same terms and conditions as are provided to general
employees of the Company provided that the medical coverage extended hereunder
shall not include the Executive Medical Plan.
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5. Executive agrees, by virtue of the termination of the Employment
Agreement, except as expressly set forth herein, to surrender and forego, as of
the date of this Termination Agreement, any and all of his right to any
benefits under paragraph 3(c) of the Employment Agreement including any car
allowance. The automobile leased by the Company on behalf of Executive (Lease
No. ) shall be assigned by the Company to Executive. Executive agrees to
assume the terms of such lease and shall comply with all obligations thereunder.
6.1. In satisfaction of the Company's obligations under the Employment
Agreement, Company shall pay to Executive the sum of $450,000 as follows:
a) $350,000 to be paid over a period of twelve (12) months
commencing as of the date of this Termination Agreement;
b) $50,000 to be paid over a period of twelve (12) months and
commencing one (1) year following the date of this Termination Agreement; and
c) $50,000 to be paid over a period of twelve (12) months and
commencing two (2) years following the date of this Termination Agreement.
All such payments under this Section 6.1 are to be made in accordance with
the Company's standard payroll practices. If Executive dies, all amounts
payable to Executive under Section 6.1 shall be paid to Executive's devisee,
legatee, or other designee or, if there is no such designee, to Executive's
estate.
6.2. Subject to the terms and conditions of Sections 3, 6.1 and the other
provisions of this Agreement, Company shall pay Executive as follows:
Calendar Year Amount Paid
------------- -----------
2002 $ 350,000.00
2003 $ 500,000.00
2004 $ 500,000.00
7. No Further Liability; Release. Payment made by the Company in
accordance with Section 6 of this Termination Agreement shall operate to fully
discharge and release the Company and its directors, officers, employees,
subsidiaries, affiliates, stockholders, successors, assigns, agents and
representatives from any further obligation or liability (other than any
obligations Company may have pursuant to Company's Stock Incentive and Stock
Option Plans) with respect to, in connection with or arising out of Executive's
employment and termination of employment. Other than making payments and
continuing any benefits and as otherwise set forth under this Termination
Agreement, the Company and its directors, officers, employees, subsidiaries,
affiliates, stockholders, successors, assigns, agents and representatives shall
have no further obligation or liability under this Agreement to Executive or
any other person or entity arising out of or related
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to Executive's employment or the termination thereof, and Executive waives any
and all rights to pursue any other remedy at law or in equity; provided,
however, that this shall not constitute a waiver or release of any rights
provided under any federal, state, or local laws or regulations relating to
discrimination in employment. The Company shall have the right to condition the
payment of any amounts pursuant to Section 5 upon the delivery by Executive to
the Company of a release (in form and substance satisfactory to the Company) of
any and all claims Executive may have against the Company and its directors,
officers, employees, subsidiaries, affiliates, stockholders, successors,
assigns, agents and representatives arising out of or related to Executive's
employment by the Company and termination of such employment.
7.1. In the event that Executive shall breach any of the provisions of
Sections 5, 6 or 7 of the Employment Agreement as modified herein and Section 8
of this Termination Agreement, in addition to any other remedies the Company
may have, the Company's obligation pursuant to Section 3, 4, 6.1 and 6.2 of
this Termination Agreement to pay and to continue certain benefits shall cease
and Executive's rights thereto shall terminate and shall be forfeited and
Executive shall promptly reimburse and repay to Company any monies paid by the
Company to Executive Subsequent to the date of termination.
8. Non-Disparagement. Executive agrees not to
a) in any way publicly disparage
Twinlab Corporation ("Twinlab"),
the parent company of the Company, Company, its subsidiaries, their affiliates,
their shareholders or any of past, present, and future officers, directors, or
employees;
b) cause embarrassment or public humiliation to such entities or
persons; or
c) make any public statement or take any action that is adverse,
inimical or otherwise detrimental to the interests of such entities or persons,
except to the extent required by applicable law.
8.1. Non-Disparagement. Company agrees not to
a) in any way publicly disparage Executive;
b) cause embarrassment or public humiliation to Executive; or
c) make any public statement or take any action that is adverse,
inimical or otherwise detrimental to the interests of Executive except to the
extent required by applicable law.
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9. Announcements; Confidentiality.
a) Neither the Company nor the Executive shall issue any press
release or otherwise make any public statement with respect to this Termination
Agreement and the transactions contemplated hereby without the prior written
consent of the other party (which shall not be unreasonably withheld), except as
may be required by applicable law.
b) In addition, except as provided in the immediately preceding
paragraph or as required by law, without the prior written consent of the
Company, the Executive agrees that he will not, and will direct his
representatives and his immediate family not to, disclose to any person or
entity any of the terms, conditions or other facts with respect to this
Agreement, including, but not limited to the termination of the Executive.
10. Remedies for Breach. The parties hereto agree that Executive is
obligated under this Agreement to render obligations of a special, unique,
unusual and extraordinary character, thereby giving this Agreement special and
extraordinary value, and, in the event of a breach or threatened breach of any
provision of this Agreement by Executive, the injury or imminent injury to the
value and the goodwill of the Company's business could not be reasonably or
adequately compensated in damages in an action at law. Executive expressly
acknowledges that the Company shall be entitled to specific performance,
injunctive relief and any other applicable equitable remedy against Executive
without the posting of a bond in the event of any breach or threatened breach
of any provision of this Agreement by Executive. Without limiting the
generality of the foregoing, if Executive breaches or threatens to breach any
of the provisions of Sections 5, 6, or 7 of the Employment Agreement as
modified herein, such breach or threatened breach will entitle the Company to
enjoin Executive from engaging in any activities prohibited by such provisions,
as is appropriate. This provision shall not be construed as a waiver of any of
the rights which the Company may have for damages under this Agreement or
otherwise, and all of the Company's rights and remedies shall be unrestricted.
11. Reasonableness of Restrictions. Executive agrees and acknowledges that
a) the provisions of Sections 5, 6 and 7 of the Employment
Agreement as amended herein may limit his ability to earn a livelihood in a
business similar to the business of the company but nevertheless agrees that
such provisions are reasonable and necessary for the protection of the Company
and do not impose a greater restraint than is necessary to protect the goodwill
or other business interests of the Company;
b) such provisions contain reasonable limitations as to the time
and the scope of activity to be restrained; and
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c) the consideration provided under this Agreement is sufficient
to compensate Executive for the restrictions imposed in Sections 5, 6, and 7 of
the Employment Agreement as amended herein. In consideration of the foregoing
and in light of Executive's education, skills and abilities, Executive agrees
that any defenses by Executive to the strict enforcement of such provision are
hereby waived by Executive and Executive agrees that he will not assert that
such provisions are void, voidable or unenforceable.
12. Miscellaneous.
12.1. Cooperation. Executive shall cooperate with the Company, as
requested by the Company, to affect a transition of Executive's
responsibilities and to ensure that the Company is aware of all matters being
handled by Executive.
12.2. Counterparts; Facsimile Transmissions. This Agreement may
be executed in any number of counterparts, each of which when so executed, then
delivered or transmitted by telefax, shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
12.3. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.4. Waivers and Amendments. This Agreement may be amended, superceded,
canceled, renewed or extended, and the terms hereof may be waived, only by
written instrument signed by the Company and the Executive. No delay on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any such right, power or privilege, nor any single or partial exercise of any
such right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege.
12.5. Entire Agreement. Except as otherwise set forth herein, this
Agreement and the other agreements referred to in this Agreement (including the
Employment Agreement) constitute the entire agreement among the parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties.
12.6. Notices. Every notice or other communication required or
contemplated by this agreement must be in writing and sent by one of the
following methods:
a) personal delivery, in which case delivery is deemed to occur
the day of delivery;
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b) certified or registered mail, postage prepaid, return receipt
requested, in which case delivery is deemed to occur the day it is officially
recorded by the U.S. Postal Service as delivered to the intended recipient; or
c) next-day delivery to a U.S. address by recognized overnight
delivery service such as Federal Express or Airborne Express in which case
delivery is deemed to occur upon receipt. In each case, a notice or other
communication sent to a party must be directed to the address for that party
set forth below, or to another address designated by that party by written
notice:
If to Executive to: Xxxx Xxxxxxxx
0 Xxxxx Xxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
If to Company to: Twin Laboratories Inc.
000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, Chief Executive Officer
with a copy to: Twin Laboratories Inc.
000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq., General Counsel
12.7. No Assignment. Executive may not assign to any person any of his
rights or obligations under this Agreement.
12.8. Governing Law. This Agreement is governed by the laws of the
State of
New York, without giving effect to principles of conflict of laws.
12.9. Jurisdiction; Service of Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement must be brought against any of the parties in the courts of the State
of
New York, County of Suffolk, or, if it has or can acquire jurisdiction, in
the U.S. District Court for the Eastern District of
New York, and each of the
parties consents to the jurisdiction of those courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any such action or proceeding may be served by
sending or delivering a copy of the process to the party to be served at the
address and in the manner provided for the giving of notices in Section 12.6.
Nothing in this Section 12.9, however, affects the right of any party to serve
legal process in any other manner permitted by law.
12.10. Successors and Assigns. This Agreement is binding upon the
parties and each of their respective successors, heirs and permitted assigns.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
TWIN LABORATORIES INC. EXECUTIVE
By: /s/Xxxx Xxxxxxxx By: /s/Xxxx Xxxxxxxx
------------------------- ------------------------
Name: Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx
Title: President
Date: 11/29/01 Date: 11/29/01
Agreed to and Accepted:
TWINLAB CORPORATION
By: /s/Xxxx Xxxxxxxx Date: 11/29/01
-------------------------
Xxxx Xxxxxxxx, President
